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Deutsche Bank maintained its Buy rating on PayPal (NASDAQ:PYPL) but cut its price target on the stock to $100 per share from $140 on Tuesday.
The Deutsche Bank analysts told investors in a research note that there are “key bogeys” heading into the company’s earnings.
While Deutsche Bank cut its PayPal FY23 revenue growth expectations from 10% cc to 7% cc in its recently published 2023 outlook, they expect the company will “successfully pull operating margin levers to drive EPS growth of at least 15% in FY23.”
However, they state that the most important debate which will drive the multiple going forward, in their view, is if PayPal is losing market share.
“As a result, we believe the most important metrics on the upcoming print will be 4Q22 US Branded TPV growth where we think the bogey is ~4% Y/Y (lower end of US eComm reported averages) and we also are estimating Intl Pypl branded growth of ~8% cc in 4Q22. Additionally, we believe PYPL’s cc TPV for FY23 will also be a key guidance metric to track with our expectations set around ~9-10% cc,” wrote the analysts.
“While we remain confident in PYPL’s ability to manage costs and grow EPS in FY23, we will continue to monitor macro headwinds facing the overall eComm market along with share shifts.”
