BMO Capital Markets has updated its outlook on PayPal Holdings Inc (NASDAQ: NASDAQ:PYPL), increasing the price target to $72.00 from the previous $65.00 while maintaining a Market Perform rating on the stock.
The adjustment, which came on Wednesday, follows PayPal's second-quarter financial results, which showed a quarter-over-quarter acceleration in transaction margin dollar growth.
"We continue to worry that it will prove challenging for PYPL to meaningfully accelerate transaction margin (TM) dollar growth (on a sustainable basis) in the medium term," said an analyst from BMO Capital.
The analyst from BMO Capital expressed concerns about PayPal's ability to sustainably increase transaction margin dollar growth in the medium term. Despite the acceleration observed in the second quarter, the performance benefited from several tailwinds, noted an analyst from BMO Capital.
The analyst weighed that while some of these tailwinds might continue in the near term, more evidence is needed to confirm that the growth in Branded Checkout transaction margins can significantly accelerate.
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