In the midst of earnings season, analysts are bullish on both Paypal Holdings Inc (NASDAQ:PYPL) and Bank of America Corp (NYSE:BAC). Analysts explain how Paypal is gaining market share and Bank of America is back to competing with its peers after leaving behind regulatory headwinds from the financial crisis.

Paypal Holdings Inc 

Bryan Keane of Deutsche Bank reiterated a Buy rating on PayPal with a $44 price target ahead of earnings. The company will post earnings on January 27 and Keane expects EPS of $0.35 on revenue of $2.455 billion, marking a 12% year-over-year increase. The analyst adds, “Despite weaker than expected Holiday sales reported by [National Retail Federation], we believe digital commerce sales remain healthy,” pointing to a 20% increase in holiday season sales.

The company is gaining market share and Keane expects this trend to continue. Thanks to economies of scale, the analyst anticipates sustainable margin expansion. He explains, “Take rate and transaction margins will drop due to mix (high growth Venmo and Braintree), less hedging and one-time gains, and signing of larger merchants, but ‘like for like’ pricing remains stable and overall op margins are heading higher, in our view.”

Even though the analyst expects Paypal to announce a stock buyback program with its earnings release, he believes future acquisitions will play a part in its growth strategy. Overall, Keane notes that Paypal is “well positioned to be one of the key winners in digital commerce.”

According to TipRanksBryan Keane has a 57% success rate recommending stocks with a +6.6% average return per rating. As of this writing, 13 analysts are currently bullish on Paypal, 3 are neutral, and 2 remain on the sidelines. The average 12-month price target for the stock between these 18 analysts is $41.88, marking a 34% potential upside from where shares last closed.

PYPL consensus

Bank of America Corp

Bank of America reported Q4 earnings on Tuesday morning, posting net income of $3.3 billion and EPS of $0.28 for the quarter. Paul Miller of FBR & Co. notes that earnings are in-line with expectations given the “tough market driven by good balance sheet/core net interest income growth and in-line fees and expenses, with some one-time items weighing on results.”

The company has been growing slower than its peers as it continued to deal with regulatory headwinds. However, Miller explains, “2H15 core loan growth and now total loan momentum begin to paint a picture that BAC could once again demonstrate some level of asset expansion.” Additionally, operating expenses were flat and the company’s credit remains ‘solid.'”

Miller concludes, “We continue to believe the company represents an attractive risk/reward profile given a projected meaningful upward trajectory in earnings and what we believe is manageable further exposure to energy.”

Paul Miller has a 49% success rate recommending stocks with a +0.7% average return per rating. Eight analysts polled by TipRanks in the last 3 months are bullish on BAC while 2 remain neutral. The average 12-month price target between these 10 analysts is $19.11, marking a 40% potential upside from where shares last closed.

BAC consensus