What to Watch For in PayPal Earnings

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PayPal Holdings Inc. (NASDAQ: PYPL) is set to report its most recent quarterly results after the markets close on Wednesday. Thomson Reuters consensus estimates call for $0.57 in earnings per share (EPS) and $3.81 billion in revenue. In the second quarter of last year, the company said it had EPS of $0.46 and $3.14 billion in revenue.

Earlier this month, PayPal and Synchony Financial announced that they had closed their consumer credit receivables transaction. Overall, this collaboration plays to both companies’ strengths in providing seamless digital payments and innovating for their partners, merchants and consumers.

Also with the completion of the transaction, PayPal and Synchrony have extended their existing co-brand consumer credit card program agreement, and Synchrony is now the exclusive issuer of the PayPal Credit online consumer financing program in the United States through 2028.

Under the terms of the transaction, and related transactions with unaffiliated third parties, Synchrony acquired $7.6 billion in receivables, including PayPal’s U.S. consumer credit receivables portfolio. This totaled $6.8 billion at the time of closing and included roughly $0.8 billion in participation interests in receivables held by unaffiliated third parties. PayPal received about $6.9 billion in total consideration at closing.

PayPal has outperformed the broad markets, with its stock up 24% in just 2018 alone. Over the past 52 weeks, the stock is up 56%.

A few analysts weighed in on PayPal ahead of the report:

  • KeyCorp has an Overweight rating and a $100 price target.
  • Citigroup has a Buy rating with a $101 target price.
  • Morgan Stanley has an Overweight rating and a $96 target.
  • Wolfe Research has an Outperform rating.
  • Stephens has a Buy rating with a $91 price target.

Shares of PayPal were last seen trading at $91.68, with a consensus analyst price target of $92.53 and a 52-week range of $57.58 to $92.35.