Apple Pay InBrowser To Have Modest Impact on PayPal (PYPL) - SunTrust's Peck
SunTrust Robinson Humphrey analyst, Robert Peck, noted that PayPal (NASDAQ: PYPL) shares were down nearly 4% on Thursday on a report that Apple Pay is to expand to mobile in-browser (from in-store and inapp) later this year ahead of the holidays. He expects the impact to be limited and left his Buy rating and $38 PT unchanged.
The analyst estimates that <5% of PYPL’s TPV comes through Apple’s mobile Safari browser and that any actual near-term impact from Apple Pay moving mobile in-browser should be much less. Apple Pay extending beyond in-store and in-app should be expected, and while it absolutely represents incremental wallet competition, the net impact should be gradual and manageable with offsets including Braintree momentum, Venmo monetization, Xoom synergies, One Touch ramp, expense rationalization, and share buybacks.
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Shares of PayPal closed at $38.92 yesterday.