Deutsche Bank analyst Bryan Keane offers insight on Paypal Holdings Inc (NASDAQ:PYPL) after holding his annual DB Tech conference today in Las Vegas. The analyst reiterated a Buy rating on PYPL stock with a $44 price target, which represents a 10% increase from where the stock is currently trading.
At the conference, Paypal CFO John Rainey countered a pool of negative investors on recent V/MA deals with an outlook of bolstered positivity. Keane in turn notes, “If there is any negative cost drag from moving towards customer choice and away from ACH, PYPL should be able to more than offset these costs with the incentives from the deals and other operating levers.”
As far as Rainey is concerned, the deals “improve our economics,” Paypal at its core upholds a “fantastic” performance, and the online payment giant boasts extreme confidence in its operating leverage momentum drivers.
Keane also notes, “PYPL advised that upfront investments in consumer choice from the V/MA deals are likely to drive LT share gains through increased consumer engagement, less attrition, and higher customer activations.”
Although mobile apps such as Apple Pay are being launched in browser and increasing competition despite lackluster adoption, Paypal continues to grow volume (29% cc in 2Q16) and increase its market share, which Rainey believes is a result of the significant value proposition provided to both the merchant and the consumer.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Bryan Keane is ranked #173 out of 4,163 analysts. Keane has a 70% success rate and realizes 10.2% in his annual returns. When recommending PYPL, Keane earns 8.3% in average profits on the stock.
TipRanks analytics demonstrate PYPL as a Buy. Based on 23 analysts polled in the last 3 months, 15 rate a Buy on PYPL, 7 maintain a Hold, while 1 issues a Sell. The 12-month average price target stands at $4.82, marking a 12% upside from where the shares last closed.