Mizuho updates PayPal to Buy from Neutral

Mizuho upgraded PayPal (PYPL) to Buy From Neutral, raising its price target from $68 to $90. The company cites its newly introduced Fastlane product as one of the reasons for the modernization.

Josh Lipton and Julie Hyman, presenters of Yahoo Finance, break down the assessment and what it means for PayPal’s future.

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This post was written by Nicholas Jacobino

Video transcription

All right, let’s get to our phone call.

Mizuho Changes PayPal from Neutral to Buy.

We are also raising our price target for this stock to 90.

This is from Dan Dolev of Mizuho.

Overall, Dan likes the company’s Fast Lane offering, which speeds up the guest checkout process.

This is actually a topic of conversation.

He believes this could increase PayPal’s transaction margin by as much as $1.5 billion.

This means that he thinks Julie has a 5 to 10 percent advantage.

Yeah, I mean that’s really the whole conversation today.

He says there has been a stabilization in branded shopping trends, um, following an analysis of major e-commerce partners for PayPal, and also that valuation looks good right now with the company trading at a historical discount to its competitors.

And then as quickly as it grows, it should turn around and improve.

You know, you were talking about numbers here.

I’ve been, I’ve always liked a good one there, isn’t that an addressable market?

He’s talking about a total addressable market of $3 trillion for Fast Lane alone.

Um, and he says 1.4 trillion of that can be realistically solved.

As you know, PayPal could somewhat address these conversations about new data showing less pressure on the branded business.

This means that the main checkout button, as well as strong early trends in Fast Lane, also indicate that mobile payment trends appear to be getting better.

This is noteworthy because secular pressures are more accentuated here on mobile devices.

It is known that stocks are basically unchanged throughout the year.

But Dan clearly sees better days ahead.

Yes, and there is some hope for Alex Chris, who is still the relatively new CEO of the company.