PayPal upgraded to “outperform” by Wolfe Research on growth potential

Investing.com -- Wolfe Research upgraded PayPal Holdings Inc (NASDAQ: PYPL) to "outperform" from "peer perform" and raised its price target to $107, on growth opportunities and operating leverage.

Brokerage highlighted PayPal’s large user base of 220 million monthly active users as a key asset. PayPal's recent focus on monetizing its Venmo and PayPal debit cards and improving branded checkout experiences was noted as a driver for future growth.

“Heading into 2025, we see room for upside given the potential to deliver a cadence of beat-and-raises as PYPL executes on its branded checkout innovations, pricing to value on Braintree, and Venmo monetization,” analyst wrote.

PayPal’s February 2025 Investor Day is expected to outline a path to high single-digit gross profit growth in 2026. Wolfe sees upside to consensus estimates, projecting adjusted earnings per share of $5.61 for 2026, compared to the Street's $5.44.

Brokerage believes the company's cost management efforts and innovations, such as the PayPal Everywhere campaign and upgraded checkout integrations, will support long-term profitability. PayPal’s shares are up 46% year-to-date, outperforming the S&P 500.

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