They offered an average PayPal stock price target for the next 12 months of $132.19, representing a potential increase of 49.28% from the closing price of $88.55 on 26 October. In addition, its future is difficult to predict.Īs of 27 October, 43 analysts tracked by MarketBeatput a ‘moderate buy’ call for PYPL. Horn added that the company’s peer-to-peer or P2P, Venmo, is unlikely to become a major driver any time soon, despite generating $900m in revenue in 2021, or 4% of PayPal’s revenue. Some governments have shown a preference for local payment processors, which could freeze PayPal out of certain markets.” PayPal’s international operations present currency and execution risk. “As the company’s revenue is directly tied to revenue at its merchant customers, PayPal is sensitive to macroeconomic conditions. “The payment-processing industry is evolving, and it is possible that new competition and future disruption could significantly reduce the profitability PayPal can generate or cut it out altogether,” said Horn. Morningstar maintains its fair value estimate for PYPL’s stock price at $135 per share. PayPal stock prediction: Analyst sentiment Competition on both sides could chip away at PayPal’s position,” he said. On the consumer side, services such as Apple Pay represent competition for PayPal. “Fintech innovation also appears to be concentrated in the e-commerce space, which has given rise to some new competitors. Horn also highlighted rising competition from rivals that try to replicate Paypal’s business model. We think this remains its key strength, but its position on both the merchant and consumer side could be challenged over the long run,” Horn said. PayPal remains a somewhat unique player within the payments space. “Longer term, though, the picture is less certain, and we see a mix of competitive opportunities and threats that create a fairly wide range of outcomes. This year, the Fed has raised borrowing costs five times since March with a total increase of 300bps, taking the Federal Fund rate target to 3%–3.25% in September.īrett Horn, Morningstar’s senior equity analyst, in a note issued on 27 July, said that PayPal is likely to face headwinds from e-commerce and electronic payments which had turbocharged the company’s growth during the Covid-19 pandemic. The most recent data indicated that inflation remains elevated, which is unlikely to change the US Federal Reserve’s ( Fed ) already aggresive stance. The US annual inflation rate, as indicated by the Consumer Price Index ( CPI ), rose by 8.2% in September below the figure of 9.1% in June. Inflation is likely to remain bad news for the Californian-based fintech leader. PayPal stock outlook: Rate hikes and increased competition The gain was short-lived and PYPL resumed its decline. The stock had managed to book its biggest gain in a single day this year, closing 11.48% higher on 28 April, a day after it reported that revenue in the first quarter of 2022 was above analysts’ expectations. PYPL fell nearly 25% in a single day for the first time this year on 2 February, after the company announced financial results for the fourth quarter of the fiscal year 2021. PayPal (PYPL) technical analysisĪ PayPal stock analysis by Trading View showed PayPal’s closing price on 26 October was nearly 71.3% below its all-time high closing price of $308.53 a share, achieved on 23 July 2021. This article examines whether other factors have affected PYPL’s ongoing downtrend, the latest stock news and PayPal’s share price forecast from analysts. However, it recorded a weekly gain of 4.97%, outperforming the Nasdaq, which rose by 2.92% in one week, according to TradingView. As a result, it has dropped more than 53% year to date ( YTD) and declined nearly 64.5% year over year ( YoY ), lagging the Nasdaq index ( US100 ), which has fallen 30.4% this year and 26.96% YoY.Īt the time of writing (27 October), PayPal’s stock dropped 0.77% to $88.55 at close on 26 October. The headwinds have continued to pressure the PYPL stock price, erasing a 116.5% gain in 2020 when the pandemic hit. The ongoing Russia-Ukraine war has raised the prices for food and energy, exacerbated inflation and prompted investors to dump growth stocks, especially in technology companies. Soaring inflation – which briefly hit the highest level in four decades in the US – has forced consumers to cut spending. The end of Covid-19 restrictions in most countries has seen less online shopping and a reduction in the need for digital payment. PayPal is operating in a market where tech growth stocks are being dumped – Photo: rafapress / Īs 2022 draws to a close, the stock price of payment giant PayPal ( PYPL ) has yet to reverse its downtrend.
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