Citi maintains a "Buy" rating on PayPal (PYPL), setting a new price target of $98, up from $97, following the company's recent 4Q results. Despite a 13% decline in stock price post-earnings, Citi believes PayPal's long-term trajectory remains strong, with 2025 transaction margin dollar growth and EPS outlook exceeding forecasts. Key concerns include slower U.S. branded volume growth and international competitiveness, but Citi sees these as manageable challenges.
The report highlights PayPal's strategic focus on improving transaction margins and EPS growth, with a credible outlook for 2025. Citi notes, "The bar is now lower... which offers a better set up into the Feb 25th analyst day," suggesting potential for positive updates. PayPal's FY25 guidance includes 4%-5% transaction margin growth and non-GAAP EPS of $4.95-$5.10, supported by expense management and share buybacks.
PayPal's current stock price is $78.18, reflecting a 0.59% increase from the previous close.