Proactive Investors - PayPal Holdings Inc (NASDAQ:PYPL, ETR:2PP)’s lower-than-expected guidance did not deter Wedbush analysts on Thursday, who reiterated support on what they saw as encouraging steps being taken by the company.
Shares fell over 10% after PayPal said in Wednesday’s results that earnings should come in at US$5.10 per share for 2024, against market expectations of US$5.49.
This was coupled with better-than-anticipated fourth-quarter and full-year results though, Wedbush pointed out, with analysts at the bank repeating PayPal’s ‘outperform’ rating.
“While 2024's guidance isn't ideal, we were encouraged by some of the actions already undertaken by management,” Wedbush analysts wrote in a note.
This includes expanding the leadership team and restructuring its focus into three end markets, including enterprises, small and medium-sized businesses and consumers.
Consolidation of the company's products and services into one value-added platform should help too, the bank continued, given positive traction already at the end of last year.
Wedbush also pointed out the planned launch of a new PayPal app and the firm’s promise of pricing actions.
“We believe these dynamic changes could gradually change the narrative on PayPal, while unlocking the company's true earnings power,” they said.
Analysts tipped PayPal shares to rise by a third to US$85 as a result.