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PayPal (NASDAQ:PYPL) will release its fourth-quarter earnings on February 9, and Wells Fargo analysts said the firm likes the setup heading into the release.
The analysts, in a note on Wednesday, told investors that app data shows a 2% quarter-over-quarter increase in total DAUs in 4Q, while SpendingPulse’s e-commerce data picked up in December.
“With revenue a ‘swing factor’ going forward due to macro, PYPL management is still signaling significant confidence in its ability to generate EPS growth of 15%+ Y/Y in ’23, as margins should expand by 100bps+ Y/Y. We like this pivot by PYPL to increasingly focus on more profitable growth, and if it can sustain its share in core checkout, then we see further upside to the shares.” wrote the analysts, who have an Overweight rating and $95 price target on PYPL.
Elsewhere, BofA analysts also released a note focused on PayPal’s upcoming earnings release.
The analysts, who have a Buy rating and $112 price target on the stock, said: “Over the past couple of months, debates around market share/competition for PYPL have escalated. However, there is no definitive data source to settle these debates, and there will likely continue to be ample concern discounted in shares until revenue estimates stop coming down.”
“We also think the Street would appreciate a more explicit and detailed view on market share metrics from PYPL management. PYPL will provide initial ’23 revs guide on the 4Q call, and we see modest downside potential to sell-side consensus of 9% growth.”
PayPal shares are down more than 3% on Wednesday.
