Wall Street analysts see potential EPS upside for PayPal

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Analysts at Wells Fargo (NYSE:WFC) and Mizuho are both fairly positive on PayPal (NASDAQ:PYPL) ahead of its upcoming earnings release on May 8.

Wells Fargo analysts told investors in a note Wednesday that the first quarter setup looks positive for PayPal heading into its earnings.

“Based on the data we’re seeing, we expect PYPL’s 1Q rev. and EPS will be solid and could potentially surprise to the upside. The stock appears undervalued here at 13.5x our ’24 EPS,” wrote the analysts, who maintained an Overweight rating and $97 price target on the stock.

Meanwhile, Mizuho analysts, who have a Buy rating on PayPal, cut the firm’s price target on the stock to $92 from $100 per share. They stated that US-branded checkout shows further softness, but PYPL’s conservative guide may help.

“Our proprietary Mizuho web traffic analysis points to incremental softness in branded checkout in March. Assessing outgoing web traffic from key PYPL partners like Etsy and Nike indicates a further step-down in its share of traffic,” the analysts wrote.

“While imperfect, the analysis may provide an additional perspective regarding US branded checkout trends.”

However, they added that the firm’s analysis shows that PYPL’s conservative guide and a high fixed cost basis should “help drive sizable upside to 2023 EPS.”