Bank of America Upgrades PayPal Holdings Inc

Investing.com — Bank of America upgraded PayPal Holdings Inc (NASDAQ: PYPL) from “neutral” to “buy” on Monday, citing progress in the company’s turnaround under new management. BofA highlighted improved execution, potential transaction growth acceleration by 2025, and positive holiday e-commerce spending trends.

The report noted that PayPal’s branded Total Payment Volume (TPV) growth has stabilized at 6%, and even slight improvements could enhance investor sentiment.

> “Investor Day could also be a positive catalyst, and we expect ample free cash flow generation & share buyback to persist.”

With a new branded checkout button rollout in 2025 aimed at improving consumer experience, management is focused on innovation within a competitive landscape.

BofA acknowledged PayPal’s conservative financial guidance, noting ample free cash flow and ongoing share buybacks as factors that could attract underweight long-only investors.

Upside risks include slowing Braintree volumes and potential tax challenges due to global regulatory changes. However, BofA considers these risks manageable at current valuations.

Additionally, BofA raised its price objective for PayPal to $103 from $86, representing about a 15% upside potential from current levels. They remain confident in PayPal’s ability to tackle challenges and maintain its turnaround momentum.