© Reuters PayPal (PYPL) cuts as Daiwa lowers EPS forecast
PayPal (NASDAQ:) was raised to Neutral from Outperform at Daiwa on Tuesday, with the company also lowering its price target for the stock to $62 from $64 per share.
Following the company’s earnings release, the company lowered its forecast for non-GAAP EPS and now calls $5.16 for 2024, down from $5.61. For 2025, they see EPS at $5.56, while for 2026 they expect $6.18.
“With the company’s guidance looking conservative, we see considerable potential for an overshoot, but at this stage we lack the conviction to factor in a strong upside,” Daiwa analysts said. “Therefore, we intend to closely watch the quarterly earnings performance to get a sense of the upside potential.”
Analysts believe it is difficult to predict medium to long-term EPS growth for the company until it returns to a clear growth trajectory for transaction margin dollars and benefits from increased investment emerge.
Once these factors come to pass, the company believes that strong earnings growth will be possible for PYPL.