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Raymond James is bearish on PayPal despite his strong start in 2023. Analyst John Davis downgraded PayPal stock to market from best, saying he expects PayPal’s market loss to continue. “To put it simply, while most investors expect initial 2023 revenue growth guidance to be below market (buy side 5-7% vs +9% market, RJe +7%), we believe 2023 revenue guidance year will mean stable or negative growth. for a branded checkout (compared to MSD+ electronic communication), which will likely lead to an even louder stock loss narrative,” Davis wrote in a note to a client on Monday. Davies continued: “While the stock is still relatively inexpensive (16x 2024E EPS non-GAAP, 14x FCF), we are stepping aside as we believe that a significant multiple expansion will prove difficult if the firm’s box office actually loses significant share. According to him, Cyber Week data for the last quarter of 2022 suggests that PayPal has lost market share, mainly due to Apple Pay. Payments processed were also down 6% year-on-year, further exacerbating the loss problem. The analyst noted that while he is confident in PayPal’s ability to cut management costs to help it beat its previous 15% earnings-per-share growth in 2023, the margin trajectory for 2024 and beyond is unclear. that will lay off 7% of its workforce to cut its cost structure PayPal shares fell another 3% after the downgrade PayPal shares are up 17% in 2023 but remain more than 34% lower compared to last year PayPal should report fourth-quarter earnings after Thursday’s call — Michael Bloom of CNBC
Credit: www.cnbc.com /
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