Positive Analyst Reviews for Visa, PayPal Earnings

Analysts expect more upside from PYPL thanks to Venmo's strength

Apr 25, 2019 at 10:40 AM
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Payments specialists Visa Inc (NYSE:V) and PayPal Holdings Inc (NASDAQ:PYPL) are in focus this morning following the companies' quarterly reports, which have a number of analysts raising their outlooks on shares of V and PYPL. Let's take a closer look at the stocks.

Visa reported a top- and bottom-line beat, and reaffirmed its 2019 outlook, while also reporting an 8% year-over-year growth in payments volume. A handful of bull notes have come through, and the highest price-target hike came from Susquehanna, setting its mark at $190.

Still, V is trading down 1.2% at $159.62, as the shares cool off after a strong run up the charts ahead of earnings. In fact, the equity touched an all-time high yesterday of $162.03, and had a 14-day Relative Strength Index (RSI) of 72 coming into today, revealing overbought conditions. The shares sport a 21.3% year-to-date lead.

PYPL, on the other hand, has spiked to record highs, last seen up almost 3% after trading up to $110.92. While revenue for the quarter was in line with expectations, earnings per share of 78 cents was well above estimates. The company also for the first time gave Wall Street insight into its Venmo service, revealing the cash transfer application has more than 40 million active accounts. Overall, PayPal added more than 9 million users in the quarter.

Of the at least seven brokerage notes that have come through, Craig-Hallum and Wedbush set the bar the highest with price targets of $125. Meanwhile, in a note titled "Can't Stop Venmo," Cantor Fitzgerald wrote that it was raising its growth expectations for the company due to Venmo's improving monetization capabilities. Twenty-four of 31 covering analysts already recommended buying PYPL, which is up 31% in 2019.

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