PayPal (PYPL): Asset-Light Deal Rebalances Toward Higher-ROI Opportunities - KeyBanc

KeyBanc analyst, Josh Beck, reiterated his Overweight rating on shares of PayPal (NASDAQ: PYPL) and raised his price target to $85 from $80 after the company concluded the sale of its U.S. consumer credit card portfolio to Synchrony, a high-quality buyer with intimate working knowledge
based on relationship history.

The analyst believes the transaction reduces credit volatility exposure and frees up substantial capital ($6B proceeds plus $1B in FCF) for investment, M&A, and shareholder returns. The EPS impact is 2018 estimates dropping slightly on revenue recognition with no capital action benefits factored in. However, the analyst believes the company warrants a higher multiple justifying the PT increase.

For an analyst ratings summary and ratings history on PayPal click here. For more ratings news on PayPal click here.

Shares of PayPal closed at $77.70 yesterday.

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