Mizuho upgrades PayPal to Buy from Neutral

Mizuho upgraded PayPal (PYPL) to Buy from Neutral, raising its price target from $68 to $90. The firm cites the company's newly introduced Fastlane product as part of the reason for its upgrade.

Yahoo Finance Anchors Josh Lipton and Julie Hyman break down the rating and what it will mean for PayPal moving forward.

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This post was written by Nicholas Jacobino

Video transcript

All right, let's get to our call the day.

Mizuho upgrading paypal from neutral to buy.

We're also raising its price target on that stock to 90.

This is from Mizuho's Dan Dolev.

Uh bottom line, Dan likes this company's Fast Lane offering which speeds up the process of guest checkout.

That's really kind of the theme of the call.

He thinks this could drive as much as a $1.5 billion boost to paypal's transaction margin dollars.

That implies he says 5 to 10% upside Julie.

Yeah, I mean, that's really the whole, the whole call here today.

He says there has been stabilization in branded checkout trends um as they analyze the the big e commerce partners for paypal and also that the valuation looks good right now that the company is trading at a historical discount to its peers.

And that then as fast sort of ramps up that that should reverse and get better.

I mean, you know, you talked about the the numbers here.

I was, I always love a good tam, don't you total addressable market?

He's talking about $3 trillion in total addressable market for Fast Lane alone.

Um and he says 1.4 trillion of that is realistically addressable.

Like the you know, paypal could sort of get at that talks about new data showing less pressure on branded business.

So meaning its core checkout button as well as strong early trends in fast Lane also says mobile checkout trends seem to be getting better.

So that that's notable as mobile is where the secular pressure has been more accentuated.

You know, the stock is basically flat for the year.

But Dan clearly seeing better times ahead.

Yeah, and there is some hope uh centered around Alex Chris who is still the relatively new CEO of the company.