Here’s what Wall St. experts are saying about PayPal ahead of earnings

PayPal (PYPL) is scheduled to report results of its first fiscal quarter before market open on April 30, with a conference call scheduled for 8:30 am EDT. What to watch for:

TARGET RAISED AHEAD OF EARNINGS: In a research note ahead of earnings, Monness Crespi raised the firm’s price target on PayPal to $88 from $80, while keeping a Buy rating on the shares. The recent run in PayPal shares has reflected the confirmation that transaction margin dollars and EPS guidance provided was conservative considering the new management team’s need to build credibility, the analyst tells investors in a research note. The firm thinks 2025 EPS estimates have likely already troughed and believes PayPal is taking the correct steps.

JMP Securities also raised its price target on PayPal to $70 from $68, maintaining an Outperform rating on the shares. Most Consumer Finance and Consumer FinTech stocks remain in a “holding pattern” as lenders remain hesitant to meaningfully loosen credit following a strong recovery in valuation during Q4 and poor relative performance during Q1, the firm tells investors in a research note. Gross profit margins at PayPal appear to finally show some signs of initial stabilization despite the ongoing mix-shift away from branded checkout, and investors may be viewing new CEO Alex Chriss’s initial 2024 guidance as beatable, JMP says.

Staying on the sidelines, Bernstein raised the firm’s price target on PayPal to $68 from $66. In the near term, the firm sees some upside to estimates, primarily because of float income and also from some of the company’s profitable growth initiatives. However, Bernstein worries about accelerating share losses for PayPal’s cash cow button in its most profitable areas, especially in U.S. and U.K.

TAP TO PAY: Last month, PayPal Holdings announced that Tap to Pay on iPhone is now available for all Venmo business profile and PayPal Zettle users in the U.S., enabling them to accept contactless card and digital wallet payments directly on their iPhones with no additional cost or hardware. This is the latest development in PayPal’s ongoing efforts to help small businesses sell more, grow their business, and manage their finances more efficiently, the company said.

Commenting on PayPal’s announcement that Tap to Pay on the Apple (AAPL) iPhone is now available for Venmo business profile and PayPal Zettle users in the U.S., Oppenheimer noted that the company has struggled to gain traction in mobile and that the new development is “certainly a step in the right direction” for a more “frictionless” experience for business users that can be executed all in the app. Tap to Pay likely targets/enhances PayPal offerings to micro and SMB businesses, an alternative to some Block (SQ) offerings, the firm adds. While Oppenheimer still thinks PayPal is a show-me story, it sees the news helping better position PayPal for long-term e-commerce market share retention. The firm has a Perform rating on PayPal.

OUTLOOK: During the company’s last earnings conference call, PayPal said it saw first quarter adjusted EPS up mid-single digits, with consensus currently at $1.22, and full year 2024 adjusted EPS in line with $5.10 last year, which compares to $5.08 consensus estimates.

SENTIMENT: Click here to check out PayPal’s recent Media Buzz Sentiment as measured by TipRanks.