© Reuters Morgan Stanley trims PayPal (PYPL) on conservative eComm view
By Michael Elkins
Morgan Stanley reiterated an Overweight rating on PayPal (NASDAQ:) and cut their price target for the online payment company to $133.00 (from $136.00) after trimming estimates ahead of 4Q22 earnings results. PYPL is expected to release 4Q results on Thursday, February 9th.
Analysts wrote in a note, “We lower our revenue estimates as we account for a more conservative view on eComm expansion in ’23, though better execution on cost savings partially offsets the EPS impact. While the near-term could be choppy, we still see PYPL outpacing eCommerce growth going forward.”
Morgan Stanley lowered revenue growth forecasts for 2023 to 4.7% from 6.9%. This is driven by lower TPV growth of 4% (vs. 5.5% prior) and Other Value Added Services Revenue growth of 14% (vs. 22% prior). However, lower revenues are partially offset by recently announced 7% global headcount reductions, consistent with management’s statements that they anticipate operating expense growth to be negative in ’23.
Shares of PYPL are down 1.79% in premarket trading on Monday.