Jefferies Postiive On PayPal Shares Heading Into Q4 Results

In a new report, Jefferies analyst Jason Kupferberg discusses Paypal Holdings Inc PYPL ahead of its upcoming earnings report on January 27.

“With shares near the low end of their trading range, we see positive risk/reward into the print, but acknowledge that more data points on execution will likely be needed to drive material and sustainable multiple expansion,” Kupferberg explained.

In the long-term, Jefferies sees Paypal as a unique investment opportunity. The firm likes that the large cap company is still growing its top-line in the mid-teens, improving its margins, is a pure-play online payment option and has both a strong global brand and a solid balance sheet.

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In addition to the prospect of Q4 earnings upside, Jefferies also believes that the company’s $6 billion in cash and no debt provide an opportunity for an aggressive share buyback program and/or M&A deals in the near future.

Jefferies maintains its Buy rating and $44 price target for Paypal ahead of earnings.

Disclosure: the author holds no position in the stocks mentioned.