PayPal (PYPL) is a technology platform and app that enables digital and mobile payments. I am bullish on the stock.
After sliding from $300 to $200 in 2021’s second half, PYPL stock might seem like a lost cause. Yet, while some folks might see the glass as half-empty, others will view it as half-full.
As we’ll see, Wall Street is mostly bullish on PayPal. However, one analyst offers a word of caution on PYPL stock.
Still, the company’s top executive isn’t worried about PayPal’s future prospects. Indeed, there are data points to show that the company might be on the cusp of a turnaround.
Likely to Get Worse?
In order to understand both sides of the issue, it’s important to see what a less optimistic Wall Street expert has to say about PayPal.
Not long ago, Wedbush analyst Moshe Katri lowered his price target on PYPL stock from $240 to $220. It’s not a massive cut, but Katri’s opinion is still worth taking into consideration.
Evidently, the analyst is concerned about the COVID-19 pandemic’s impact on consumer spending and travel weighing on PYPL stock next year.
Katri cited “uninspiring” Black Friday and Cyber Monday sales, along with a broader “retail data miss.” With those issues in mind, Katri expects things to “likely get worse” before they get better.
Also, the Wedbush analyst is concerned about inflation driving up the price of goods and thereby scaring consumers into saving instead of spending.
Delivering the Numbers
Only time will tell whether high inflation persists into 2022, and whether the COVID-19 pandemic continues to have a negative impact on consumer spending.
Katri’s concerns might turn out to be overstated, and if that’s the case then PYPL stock should be poised for a rebound.
For his part, PayPal President and CEO Dan Schulman doesn’t seem overly concerned about his company’s prospects for 2022.
Schulman had some data points to back up his bullish stance. For one thing, digital sales at the start of 2021’s holiday shopping season were flat this year, after rising by 50% last year.
That might not sound like good news, but check this out. Retail sales fell 26% from their pre-pandemic levels in 2019. This suggests that online shopping is here to stay – and of course, that’s great for PayPal.
Furthermore, PayPal forecast 55 million net-new active users for 2021, and according to Schulman, the company is on target to deliver that number. Impressively, PayPal is expected to meet the target of 750 million total users by the year 2025.
Not only that, but buy-now, pay-later sales were up 400% year-over-year on Black Friday. Schulman asserts that PayPal is one of the top four buy-now, pay-later players in the world.
Wall Street’s Take
According to TipRanks’ analyst rating consensus, PYPL is a Strong Buy, based on 26 Buy, five Hold, and one Sell ratings. The average PayPal price target is $270.87, implying 41% upside potential.
The Takeaway
Clearly, not every Wall Street expert likes PayPal’s prospects for 2022. However, the majority of the analysts give PYPL stock a Strong Buy rating.
Moreover, PayPal’s CEO is clearly optimistic about his company, and there’s data to back up his bullish stance.
Thus, PYPL stock might turn a corner very soon, as the next year is likely to be a strong one for this digital payments contender.
Disclosure: At the time of publication, David Moadel did not have a position in any of the securities mentioned in this article. Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates Read full disclaimer >
