PYPL Stumbles Amid Fourth-Quarter Uncertainty

The security received mixed notes from analysts

Deputy Editor
Nov 3, 2020 at 9:03 AM
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The shares of Paypal Holdings Inc (NASDAQ:PYPL) are down 5.7% at $177 this morning after the digital payments company topped Wall Streets estimates with its third-quarter earnings and revenue, but forecast a fourth-quarter outlook that missed the mark. PayPal's CEO Dan Schulman noted that the company was being conservative with its current-quarter forecast due to pandemic-related uncertainty, its impact on the global economy, and general unease surrounding the U.S. presidential elections, as well as the recent social unrest brewing in the United States and elsewhere. 

Several analysts chimed in with mixed responses. At least three in coverage cut their price targets, including Rosenblatt Securities, which slashed its estimate to $250 from $280. On the other hand, no less than five members of the brokerage bunch upped their price targets, the highest being from Evercore ISI to $240. 

Analysts were mostly positive on PYPL coming into today, with over 77% of those in coverage calling it a "buy" or better, and not a single "sell" to be seen. Adding to this, the 12-month consensus price target of $222.93 was at a 25.2% discount to last night's close. 

This general enthusiasm comes as no surprise, as PYPL continues to trade quite close to its Oct 21 all-time high of $215.83. Some of this recent negative price action could spook Wall Street, though, leaving PYPL susceptible to more bear notes. Not only did the equity fall back below its late-August post-earnings bull gap earlier in the week, it's set to close well below its 100-day moving average, which provided support for a mid-September pullback. For the year, however, PYPL is still up over 73%. 

 

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