Morgan Stanley Rates PayPal, Says Its Growth Dependent On E-Commerce Growth Normalization

Morgan Stanley analyst James Faucette thinks e-commerce growth probably needs to normalize before investors can turn positive on PayPal Holdings, Inc PYPL.
Faucette had an Over Weight with a price target of $129.
Data from the MS Proprietary acceptance tracker supports his view that PYPL's wide acceptance lead and growing merchant share (especially among large sellers) can help it keep growing faster than e-commerce.
Also Read: Wells Fargo Sees Tricky Q2 For PayPal Amid Subdued Broader E-Commerce Growth, Inflation; Cuts Price Target By 16%
He notes that Pay with Venmo acceptance stood at just 3% by count in 2Q.
However, Faucette adds that exposure through Amazon.com Inc AMZN, where it should become available in 2H, and its reach to 85 million young consumers should support Venmo's further expansion among merchants.
Faucette thinks that it probably makes sense for PYPL to work toward integrating other BNPL options like Affirm Holdings, Inc AFRM and Klarna into its branded checkout option.
Price Action: PYPL shares traded higher by 2.32% at $82.10 on the last check Thursday.