BofA Sees In-line Q1 Print, Risk to FY22 Guidance -Breaking
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Jason Kupferberg, Bank of America Analyst, raised the price target for PayPal (NASDAQ) from $107.00 to $118.00.
PYPL is expected to meet Q1 forecasts with Street analysts calling for 6.2% revenue growth and $0.88 EPS. He sees some risk in the FY22 guidance.
“Management also said on the 4Q21 call that to achieve the upper part of the ˜15-17% revenue growth guidance range for ’22, the macro backdrop would need to improve. However, that was before inflation grew and the Russia/Ukraine conflict broke out. In a client letter, Kupferberg explained that PYPL’s risk of falling below its ’22 guidance is increasing. “Macro headwinds could simply not permit the company achieve its 2H trajectory for top-line acceleration (ie. targeting 20%+ revenue growth 4Q) as discretionary E-commerce spending among lower-income cohorts could face incremental pressure.”
Kupferberg maintained a Neutral rating on PYPL shares, mainly due to the limited visibility.
When it comes to the recovery, Kupferberg says that the success of new initiatives will ultimately be a major determinant of PYPLs ability to achieve its stated target for a 20% revenue CAGR from 22-˜25.
PayPal launched a series of initiatives to help accelerate its growth.
By Senad Karaahmetovic
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