Why Elliott Management's PayPal Stake, New CFO Are Turning This Analyst Bullish

PayPal Holdings Inc PYPL holds the potential for upside to consensus estimates that's driven by additional cost efficiencies and share buybacks, according to a BofA Securities analyst. 

The PayPal Holdings Analyst: Jason Kupferberg upgraded PayPal Holdings from Neutral to Buy and raised the price target from $94 to $114.

Related Link: PayPal Analysts Increase Price Targets Following Earnings Report, Elliott Management's $2B Investment

The PayPal Holdings Takeaways: Initiatives by activist investor Elliott Management are likely to drive the company’s performance higher, Kupferberg said in the Wednesday upgrade note.

“PYPL’s new CFO, Blake Jorgensen, has a track record of executing well on cost/margin initiatives,” the analyst said. 

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“Based on potential $5+ of EPS power next year, PYPL trades at 18.4x P/E, which in our view represents attractive risk/reward, as Elliott’s involvement likely provides support to the stock,” he said. 

“Potential catalysts include 2H top-line re-acceleration and 1Q23 Analyst Day, where we expect PYPL will discuss more detailed multi-year capital deployment strategy, reflecting increased return of cash to shareholders,” Kupferberg said. 

PYPL Price Action: Shares of PayPal Holdings were trading 2.95% higher at $94.51 midday Wednesday.