PayPal's (PYPL) Apple Pay deal should address competition concerns - Morgan Stanley

Morgan Stanley analyst James Faucette reiterated an Overweight rating and $126.00 price target on PayPal (NASDAQ: PYPL) after the company announced that its credit and debit cards, including the Venmo credit/debit card, will be available to add to the Apple Wallet and can be used to make tap payments using an iPhone/Apple Watch or online with the Apple Pay option. The analyst said the Apple Pay partnership helps address competition concerns.

The analyst commented, "We think the news should be a modest relief to investors, as concern around share loss to Apple Pay has been a key debate around PYPL amid Apple Pay’s faster growth and heavier usage among younger consumers. We’ve consistently said that PayPal will eventually need to find ways to integrate its payment options within the Apple ecosystem in order to address these concerns long-term, especially given Apple’s unique hardware/tech advantage within payments (see our report, The Great Debate: PayPal vs. Apple Pay). As we laid out in our Alphawise Digital Wallet Consumer Survey report, we think levering more partnerships should be a key strategy pursued by fintech and payments players (especially in this environment of higher capital costs) to quickly expand availability and functionality while focusing investments on core capabilities."

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 $57.30 yesterday.

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