PayPal’s 2023 earnings appear largely de-risked, says Bernstein

Bernstein analyst Harshita Rawat notes that PayPal stock is now trading at its bottom one percentile relative multiple in its history as a public company. Investors’ concerns around share loss for the core button, PayPal’s profit engine, drove the multiple compression. On Q4 earnings and 2023 guidance, Rawat says he believes PayPal is likely to guide below consensus on revenue and while he is below consensus on revenue, the analyst is "less worried about EPS." Unlike many tech stocks, PayPal’s 2023 earnings appear largely de-risked even in an uncertain macro environment, Rawat points out. That said, he hesitates to recommend the stock just yet. PayPal’s 2023 may shape up to be a tug-of-war between multiple fears and EPS growth, he adds. The analyst has a Market Perform rating on the shares with a price target of $90.