PayPal (PYPL): Splashing Cold Water on The Bear Case - Nomura
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Nomura Securities analyst, Bill Carcache, reiterated his Buy rating on shares of PayPal (NASDAQ: PYPL) ahead of 3Q16 earnings on October 20th after the close.
The analyst expects the numbers to be in line but more importantly, most of the focus should be on the outlook. The analyst does not anticipate full-blown 2017 guidance this quarter expects PYPL to offer additional details on its margin expectations. He believes investors walked away from last quarter’s earnings call believing that PYPL was guiding to margin compression, but commentary in recent public appearances has been more bullish.
The analyst stated "we think “stable” would be good enough for the margin outlook but expect shares to enjoy an incremental boost if management guides to potential expansion, while emphasizes the accretive nature of its recent partnership deals—a possibility that we believe makes the risk-reward attractive and leads us to recommend buying PYPL into the print".
No change to the price target of $54.
Shares of PayPal closed at $39.24 yesterday.
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