PayPal stock rating reiterated at Outperform by KBW despite selloff

Investing.com - Keefe, Bruyette & Woods has reiterated an Outperform rating and $85.00 price target on PayPal (NASDAQ:PYPL) following the company’s second-quarter 2025 results.

KBW analyst Sanjay Sakhrani raised earnings per share estimates for PayPal to $5.22 from $5.08 for 2025 and to $5.90 from $5.65 for 2026, citing higher net revenues and a lower tax rate as primary factors. The company has demonstrated steady profitability with revenue growing at 4.79% over the last twelve months.

The firm expressed surprise at the magnitude of the market selloff, noting that investors should have been prepared for muted branded checkout growth and a deceleration in transaction margin dollars, excluding one-time items. InvestingPro data shows the company maintains a GOOD Financial Health Score, with particularly strong metrics in profitability.

KBW acknowledged that the further deceleration implied for the second half of 2025 is disappointing, with management’s guidance suggesting the low end of projections accounts for potential additional macroeconomic headwinds.

The research firm maintained its Outperform stance based on favorable valuation metrics, while cautioning that improvements in PayPal’s fundamental performance "could take some time to play out" despite management’s optimism about traction from new initiatives.

In other recent news, PayPal has reported its financial results for the second quarter of 2025, exceeding Wall Street expectations in both earnings per share and revenue. Despite these positive earnings, the company’s stock saw a decline. PayPal has also raised its full-year guidance, indicating anticipated growth in transaction margin dollars and non-GAAP earnings per share. Truist Securities maintained a Sell rating on PayPal, expressing concerns about the quality of the company’s growth drivers. KeyBanc Capital Markets kept a Sector Weight rating, noting concerns about tariff impacts despite some positive results in revenue and transaction profit. Citizens JMP adjusted their price target for PayPal from $110 to $100 while maintaining a Market Outperform rating, citing competitive pressures from digital wallets and ongoing investments. These developments highlight a mix of positive financial performance and cautious analyst perspectives.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.