Wedbush Starts PayPal (PYPL) at Neutral
Wedbush initiates coverage on PayPal (NASDAQ: PYPL) with a Neutral rating and a price target of $40.00.
Analyst Gil Luria commented, "We see PayPal as an enduring leader in the payments market which should allow for several more years of 15%+ revenue and earnings growth. We expect PayPal to complete its spin-off on July 20th and are initiating with a NEUTRAL rating and $40 price target. Further analysis of PYPL can be found in our preliminary view note."
The analyst noted results top consensus ahead of spin. "Revenue of $2,260 million represented constant currency growth of 19%, a 2pp sequential acceleration. Global Active Accounts grew 11% (in line with Q1) to 169 million. Payment transactions of 1,802 million drove constant currency TPV growth of 28%, a 3pp sequential acceleration. Operating margin of 26.1% helped drive upside for EBAY's last quarter before the spin, though management cautioned that margin would come down in 2H15."
The firm believes Braintree/Venmo are not only driving much of the TPV acceleration, but also serve as strategic cornerstones in the upcoming mobile wallet wars. Also, they expect PayPal to benefit from Xoom acquisition in multiple ways.
For an analyst ratings summary and ratings history on PayPal click here. For more ratings news on PayPal click here.
Shares of PayPal closed at $ yesterday.