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PayPal Finds Favor with Monness Crespi and Goldman Sachs
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Monness Crespi Hardt upgraded PayPal Holdings, Inc. (PYPL - Free Report) from neutral to buy in the first trading session of 2017. The firm’s price target on the stock is $50, thereby indicating a 27% surge from its closing price on Friday. The stock jumped 1.98% in the day’s trading.
For the last one year, the stock has outperformed the Zacks Internet - Software industry. It gained 13.58% as against the industry’s loss of 4.20%.
Why the Upgrade
Monness Crespi highlighted some important factors currently working in favor of PayPal such as increasing cashless trends, favorable regulatory environment and the company’s ability to strike deals.
A note from analysts read,” while PayPal's business model relies on being able to strike deals, the ability to deliver outsized growth versus peers off this large of a base, while trading at a discount, deserves constructive scrutiny."
Separately, Goldman Sachs expressed bullishness about Internet stocks in 2017, putting giants like Amazon (AMZN - Free Report) , Alphabet (GOOGL - Free Report) , Pandora and PayPal on its “conviction list”.
According to Heath Terry, an analyst at Goldman Sachs, Internet stocks are expected to outperform the broader market in 2017 driven by strong growth, high rates of return and attractive valuations, partially offset by margin pressure in some segments and an expected rise in equity issuance.
Bottom Line
PayPal has been performing strongly in global payments, both online and mobile. The company ended the third quarter with 192 million active customer accounts.
Partnership and mobile centrism were PayPal’s top priorities. The company’s ongoing strategic partnerships with Visa, MasterCard and Citigroup offer great flexibility and choice to consumers. Partnerships with Facebook, Apple, and Alibaba are also delivering positive results.
Paypal is also exploring partnerships across multiple original equipment manufacturers (OEM), technology companies, retailers and financial institutions. It recently partnered with Latitude Financial Services to develop consumer financing products in Australia.
PayPal has also accelerated its push into mobile with Venomo, continuing to bolster its stake in mobile payments. Last quarter, the company’s mobile payment volume was $26 billion, up 56% and representing 29% of total payment volume (TPV). (Read more: PayPal Q3 Earnings Beat on Rise in Active Accounts)
We expect PayPal’s opportunities in the fast-growing mobile space, strategic partnerships and a strong balance sheet to remain positives going forward. However, growing competition, continuous exposure to foreign exchange and interest rate risks are concerns.
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
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PayPal Finds Favor with Monness Crespi and Goldman Sachs
Monness Crespi Hardt upgraded PayPal Holdings, Inc. (PYPL - Free Report) from neutral to buy in the first trading session of 2017. The firm’s price target on the stock is $50, thereby indicating a 27% surge from its closing price on Friday. The stock jumped 1.98% in the day’s trading.
For the last one year, the stock has outperformed the Zacks Internet - Software industry. It gained 13.58% as against the industry’s loss of 4.20%.
Why the Upgrade
Monness Crespi highlighted some important factors currently working in favor of PayPal such as increasing cashless trends, favorable regulatory environment and the company’s ability to strike deals.
A note from analysts read,” while PayPal's business model relies on being able to strike deals, the ability to deliver outsized growth versus peers off this large of a base, while trading at a discount, deserves constructive scrutiny."
Separately, Goldman Sachs expressed bullishness about Internet stocks in 2017, putting giants like Amazon (AMZN - Free Report) , Alphabet (GOOGL - Free Report) , Pandora and PayPal on its “conviction list”.
According to Heath Terry, an analyst at Goldman Sachs, Internet stocks are expected to outperform the broader market in 2017 driven by strong growth, high rates of return and attractive valuations, partially offset by margin pressure in some segments and an expected rise in equity issuance.
Bottom Line
PayPal has been performing strongly in global payments, both online and mobile. The company ended the third quarter with 192 million active customer accounts.
Partnership and mobile centrism were PayPal’s top priorities. The company’s ongoing strategic partnerships with Visa, MasterCard and Citigroup offer great flexibility and choice to consumers. Partnerships with Facebook, Apple, and Alibaba are also delivering positive results.
PAYPAL HOLDINGS EPS Diluted (TTM)
PAYPAL HOLDINGS EPS Diluted (TTM) | PAYPAL HOLDINGS Quote
Paypal is also exploring partnerships across multiple original equipment manufacturers (OEM), technology companies, retailers and financial institutions. It recently partnered with Latitude Financial Services to develop consumer financing products in Australia.
PayPal has also accelerated its push into mobile with Venomo, continuing to bolster its stake in mobile payments. Last quarter, the company’s mobile payment volume was $26 billion, up 56% and representing 29% of total payment volume (TPV). (Read more: PayPal Q3 Earnings Beat on Rise in Active Accounts)
We expect PayPal’s opportunities in the fast-growing mobile space, strategic partnerships and a strong balance sheet to remain positives going forward. However, growing competition, continuous exposure to foreign exchange and interest rate risks are concerns.
Currently, PayPal has a Zacks Rank 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>