PayPal Gains on BMO’s Upgrade to Outperform
Investing.com – PayPal Holdings stock (NASDAQ:PYPL) traded nearly 2% higher in Monday’s premarket following an upgrade to ‘outperform’ by BMO on valuation, according to StreetInsider.
Analyst James Fotheringham sees the stock at $224, down from $278 to reflect the multiple compression that took place in 2021.
The new target is around 19% higher than the stock’s Friday close of $188.58. The stock lost over 19% in 2021 while the S&P 500 rose nearly 27%.
Fotheringham believes payment stocks are set up constructively for this year and expects PayPal to hold potential of a 21% annual organic revenue growth. He also noted that tax loss selling is done and investors are focused on more normalized 2023 estimates for valuation.
Besides PayPal, the brokerage also recommended buying Nuvei (TSX:NVEI) and Global Payments (NYSE:GPN) in the sector. Mastercard (NYSE:MA) and Visa (NYSE:V) are also favored ‘buys’ as core holdings, according to the analyst.
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