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A Deutsche Bank analyst raised the price target on PayPal (NASDAQ:PYPL) to $140 from $114 to reflect the company’s improving outlook.
The analyst argues that PayPal’s new reset expectations, after the last guidance cut, “finally look achievable.” Moreover, the new CFO and Elliott’s involvement should help the company become more disciplined on the cost side.
“While it is clear that PYPL will still need to continue gaining share and deepening user engagement, we believe the KPI benchmarks the company must hit to meet updated guidance are more realistic than before,” he said in a client note.
The analyst sees upside potential to the bank’s current adjusted operating margins amid cost reductions and opex savings.
“With more reasonable top-line guidance, easing eComm comps starting in 3Q22, and new cost-cutting initiatives, we believe PYPL is now fully on a path to recovery so long as it can deliver on its new, more achievable expectations,” he concluded.
PayPal shares are up almost 1% in premarket Monday.
