PayPal (PYPL) shares are pushing higher today following media reports that the digital payments pioneer has attracted unsolicited buyout interest. According to Bloomberg, one of the potential suitors wants to take over the entire company, while others are interested in particular assets like Venmo and Braintree.
Despite today’s surge, PayPal stock is still down about 25% versus its year-to-date high.
Here’s Why a Takeover Is Bullish for PayPal Stock
PYPL stock is worth buying amid takeover interest as a formal proposal will likely offer a notable premium over its current price to secure board approval.
Plus, a potential suitor (like a major bank or fintech giant) could integrate 438 million active PayPal accounts into a broader ecosystem, helping scale its high-margin branded checkout and Venmo assets more efficiently than PayPal can alone.
Such an agreement may remove pressure of meeting quarterly estimates and leadership transition as well, enabling the fintech firm to restructure away from the public eye.
What’s also worth mentioning is that PayPal is testing its 20-day moving average (MA) at the $45 level as of this writing. A decisive break above this price may accelerate upward momentum in the near term.
Mizuho Sees Significant Upside in PYPL Shares
Mizuho’s senior analyst Dan Dolev maintained his bullish view on PayPal shares following reports of buyout interest on Monday. At roughly 7x earnings (2027), the fintech stock is massively undervalued compared to its historic forward multiple of nearly 20x, he told clients in a research note today.
Within payment networks, PYPL is one of the four globally recognized brands alongside American Express (AXP), Visa (V), and Mastercard (MA).
According to the Mizuho analyst, Venmo and a fast-growing buy-now-pay-later (BNPL) business positions the Nasdaq-listed firm well for long-term growth.
His $60 price targets on PayPal Holdings signals potential of 35% upside from here.
PayPal Is Trading Below Wall Street’s Average Price Target
Other Wall Street firms seem to agree with Mizuho’s view on PayPal as well.
While the consensus rating on PYPL shares sits at a “Hold” only, the mean price target of nearly $53 indicates potential for a 20% rally from current levels.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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