Mizuho analyst Dan Dolev upped his price target on PayPal Holdings Inc.’s stock
to $350 from $290, writing of traction for the company’s bitcoin
efforts. His new target is higher than all those listed on FactSet. “Both our survey and management commentary unveil a dramatic increase in engagement due to crypto,” he wrote in a note to clients. “As evidence, PayPal recently said that 50% of its crypto users are opening the PayPal app daily.” Dolev sees the potential for PayPal to generate nearly $2 billion in revenue from bitcoin in 2023, which equates to 10% upside over his current overall revenue estimate for the period. Dolev’s survey work indicated that those engaging in bitcoin trading through PayPal’s platform demonstrate PayPal app usage that’s three times higher than non-bitcoin traders. They also have higher cash balances, he said. PayPal announced in October that it would begin letting users buy, sell, and hold cryptocurrencies through its app. MoffettNathanson analyst Lisa Ellis is also upbeat about the opportunity in bitcoin. “Over the long-term, we believe PayPal’s cryptocurrency initiatives have significant strategic value, helping PayPal diversify the PayPal and Venmo apps into ‘destination apps’ for a broad range of financial services, and positioning PayPal to help shape the long-term role of cryptocurrencies (and government-backed digital currencies) in the consumer payment system,” she wrote in a Friday note to clients, while raising her price target on the stock to $300 from $280. In the near term, she thinks cryptocurrency services could contribute about 2 percentage points, or $300 million to $600 million, to PayPal’s 2021 revenue. The stock has gained 111% over the past 12 months as the S&P 500
has risen 15%.
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