PYPL: In-line 2Q likely not much of catalyst; focus on commentary from new CEO

Research evidence excerpt

PYPL: In-line 2Q likely not much of catalyst; focus on commentary from new CEO

Payments, Processors, and IT Services Equity Research

Wells Fargo Express Takeaways

PayPal Holdings, Inc. (PYPL) | Rating: Equal Weight | Price Target: $48.00

Analyst: Jason Kupferberg

Financials Investment Thesis

While PayPal (Equal Weight rated) has a strong global dual-sidedFY (Dec) 2025A 2026E 2027E

$ network of consumers and merchants, we believe the company

ESTIMATES will struggle to accelerate branded TPV growth in the near term,

EPS prolonging concerns about achievement of the 8-10% target in

Q1 1.33 A 1.34 A 1.42 E '27. PYPL has increased product velocity and newer initiatives, but

Q2 1.40 A 1.27 E 1.38 E we await evidence whether they will move the needle. Sentiment is

Q3 1.34 A 1.30 E 1.41 E

Q4 1.23 A 1.39 E 1.55 E weak, but catalysts seem sparse.

AN 5.30 A 5.30 E 5.76 E

Rev. (MM) 33.17B A 34.48B E 36.36B E

EBIT (MM) 7,229.0 A 5,978.2 E 5,893.8 E Risk vs. Reward – Upside/Downside Price Target Scenarios

FCF (MM) 6,411.0 A 6,335.3 E 7,314.8 E

Upside Scenario $58.00WELLS FARGO vs. CONSENSUS

Consensus Estimate 5.31 A 5.30 E 5.75 E

Difference from Consensus 0.0% 0.0% Base Case $48.00

* $45.65

VALUATION

Downside Scenario $37.00P/E 8.6x 8.6x 7.9x

FCF Yield 15.3% 15.1% 17.4%

Consensus Estimate: Adj. EPS (includes stock-based comp); Source: VisibleAlpha $30 $40 $50 $60 $70

Source: Company Data, Wells Fargo Securities estimates, and Factset.

NA = Not Available, NE = No Estimate

*As of 07/07/26

Source: Wells Fargo Securities, LLC estimates and Factset.

Base Case | $48.00 Upside Scenario | $58.00 Downside Scenario | $37.00

Our $48 PT is based on 9x C26E P/E and Upside to our PT would be driven by faster- Downside to our PT could be driven

DCF (10% WACC, 2% terminal growth).