UPDATE: Evercore ISI Starts PayPal (PYPL) at Sell
Evercore ISI initiated coverage on PayPal (NASDAQ: PYPL) with a Sell rating and a price target of $36. The sell rating is consistent with Evercore ISI's view prior to its separation from eBay (NASDAQ: EBAY).
Analyst Ken Sena said, "With PayPal (PYPL) shares beginning to trade regular way Monday 7/20, we are officially initiating coverage on PYPL standalone, along with the help of our Fin Tech team led by David Togut, at a SELL rating (consistent with prior)."
"Our concerns reflect the relevancy of PayPal in a mobile-first world (concerns we have previously laid out). While we do recognize that their business is moving in a direction favoring merchant acquiring, peer-to-peer, and remittance, and we look forward to working with the Fin Tech team on these newer areas of focus, we nevertheless expect pressure to its core networking revenues where its higher-margin ACH funding factors much more materially. That said, 2Q results showed progress, with volumes 3% better than expected at $66bn (20% y/y, or 28% FXN), representing 300bps of sequential growth reacceleration on an FX neutral basis, suggesting our concerns are taking more time to materialize than we had thought, if no less real," added the analyst.
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 $38.39 yesterday.