- Wells Fargo analyst Jeff Cantwell's post-conference call with PayPal Holdings, Inc (NASDAQ:PYPL) listed multiple challenges for PayPal going forward.
- They saw that the competition had increased significantly for PayPal across its merchant and consumer businesses due to advances made by others, including Adyen N.V. (OTC:ADYYF), Stripe, and Apple Inc (NASDAQ:AAPL), fueling doubts about the sustainability of PayPal's moat.
- They believe that PayPal's share in online checkout may shift further away from PayPal due to weaker product innovation.
- They saw pricing headwinds (take rate) increasingly likely for PayPal over the longer term.
- Due to the challenges, they expected a consensus EPS estimate of $(4.78) to come down for next year, and longer-term sustainable EPS growth for PayPal may miss the 20%+ annually.
- Cantwell reiterated an Overweight on PayPal with a price target of $115 (48% upside).
- Price Action: PYPL shares traded lower by 2.17% at $76 on the last check Monday.
