PayPal Holdings, Inc. (NASDAQ: PYPL) experienced a decline of 2.6% in share price during trading on Wednesday following a downgrade from BNP Paribas Exane. The firm reduced its price target for PayPal from $71.00 to $69.00, maintaining a neutral rating on the stock. At its lowest, PayPal shares traded at $60.41 before closing at $61.24. The trading volume surged to approximately 24,331,510 shares, representing a 95% increase from the average daily volume of 12,451,697 shares.
Investors received mixed assessments from various equities research analysts. On October 30, 2023, Mizuho set a price target of $84.00 for PayPal shares. Conversely, Jefferies Financial Group lowered its target from $75.00 to $60.00 while maintaining a “hold” rating. Citigroup upgraded PayPal to a “hold” rating on October 23, 2023, and DBS Bank reduced its price objective from $75.00 to $70.00, also assigning a “hold” rating. Morgan Stanley reiterated a “negative” rating on October 29, 2023.
Current consensus ratings from MarketBeat show that fifteen analysts recommend buying the stock, while nineteen advocate for holding and four suggest selling. The average target price stands at $81.67.
Institutional Investor Activity
Recent activity among institutional investors indicates fluctuating confidence in PayPal. IFP Advisors Inc. increased its holdings by 3.9% in the third quarter, now owning 49,166 shares valued at $3,297,000. Swiss Life Asset Management Ltd also raised its stake by 7.0%, acquiring an additional 14,746 shares, bringing its total to 225,198 shares valued at $15,102,000.
Other notable changes include CIBC Bancorp USA Inc. purchasing a new position worth about $11,109,000, while Achmea Investment Management B.V. expanded its holdings by an impressive 127.9%, now owning 474,631 shares valued at $31,828,000. Currently, institutional investors and hedge funds own 68.32% of PayPal’s stock.
Recent Earnings and Future Guidance
PayPal released its latest earnings results on October 28, 2023, reporting earnings per share of $1.34, surpassing the consensus estimate of $1.20 by $0.14. The company achieved a net margin of 14.96% and a return on equity of 25.64%, with quarterly revenue reaching $8.42 billion, exceeding the estimated $8.21 billion. In comparison, the same quarter the previous year yielded earnings of $1.20 per share.
Looking forward, PayPal has set guidance for the fourth quarter of 2025, predicting earnings per share between $1.270 and $1.310, and a full-year guidance of $5.350 to $5.390 per share. Analysts forecast an average of $5.03 earnings per share for the current year.
In addition to these developments, PayPal announced a quarterly dividend of $0.14, scheduled for payment on December 10, 2023. The record date for investors is set for November 19, 2023, marking an annualized dividend of $0.56 and a yield of 0.9%. The company’s payout ratio currently stands at 11.22%.
PayPal operates a technology platform that facilitates digital payments for both merchants and consumers globally. Its services include a vast network enabling transactions through various funding sources, including bank accounts, credit products, and cryptocurrencies, among others.
