New Street Research starts PayPal at Buy as company pivots to value

PayPal (NASDAQ:) was initiated with a Buy rating and $80 per share price target at New Street Research on Friday.

Analysts at the firm highlighted that almost nine months in, new CEO Alex Chriss is looking to pivot PayPal to value from price and better leverage the company’s unique two-sided advantages it has over competitors, Adyen, Stripe & even Apple Pay.

They noted that the first step has been Braintree’s “more rational approach to pricing contract renewals – good for all in the market.” In addition, Fastlane, a new guest checkout, is seen as potentially lifting unbranded volume (first) and then pricing (to follow).

“Other areas of better monetisation should follow over the next 6-12 months,” said New Street, pointing to Venmo (deposit capture), broader debit card adoption and Xoom, PayPal’s generally forgotten cross-border currency business.

“2024 is a transition year; we expect to hear news and supportive KPIs on new initiatives before monetisation comes through more in 2025, driving
Transaction margin $ ahead of street estimates,” stated the firm.