PayPal (PYPL): Notes From Management Meeting - Jefferies
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Jefferies analyst, Jason Kupferberg, reiterated his Buy rating on shares of PayPal (NASDAQ: PYPL) after meeting with management. The analyst believes that concerns regarding recent V/MA partnerships are overdone, credit remains an important ancillary offering and Pay With Venmo is seeing solid early results but noticeable monetization will likely be longer-dated.
PYPL will likely provide more color on the net financial implications of the recent V/MA partnerships during the next earnings call, while detailed 2017 guidance will be communicated on the 4Q call.
The analyst thinks potential partial offsets to higher transaction expense are not fully appreciated by the Street. The analyst stated "PayPal continues to believe a meaningful majority of volumes at risk to move from ACH to card as a result of consumer choice will likely be to debit, as debit is a much more similar payment instrument to ACH, while heavy credit card users are likely already using a credit card to fund their PYPL transactions. Management also highlighted that on a fully loaded basis, the cost differential between ACH and debit is not as significant as some may believe, given the higher fraud experienced with ACH".
No change to the price target of $48.
Shares of PayPal closed at $38.77 yesterday.
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