Paypal: Credit Suisse neutral, cuts target price

(CercleFinance.com) - Credit Suisse maintains its "neutral" rating on the PayPal stock, reducing its target price for it from $85 to $80.


The analyst cites a backdrop of pressure on gross margins in Q1, which saw PayPal record transaction margins that fell by around 375bp year-on-year.

"Our updated model suggests ~150-200bps was related to increased Braintree mix, while an additional ~130bps was related to loan loss normalization," Credit Suisse says, suggesting that the remaining 50-100 bp was related to a combination of small business headwinds and adverse exchange rates.

Against this backdrop, Credit Suisse says it expects 2024 EPS of $5.59 (down from $5.65), due to minor additions to its trading expense forecast.


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