On Monday, PayPal Holdings Inc. (NASDAQ:PYPL) shares edged slightly lower despite receiving an upbeat statement from the Kansas City Fed. The city’s research briefing department said PayPal, Square Inc. (NYSE:SQ) and Affirm Holdings Inc. (NASDAQ:AFRM) could replace credit cards in the foreseeable future.
The department thinks the Buy Now Pay Later services could take over the credit market with banks losing $8-$10 billion in revenue per year over the last two years. Credit card companies like Mastercard Inc. (NYSE:MA) and Visa Inc. (NYSE:V) could witness a significant decline in profits amid the increasing popularity of BNPL payments, with PayPal and its peers benefitting.
PayPal’s exciting growth
From an investment perspective, PayPal shares trade at a reasonable forward P/E ratio of 34.84, making it an interesting option for value investors.
In addition, analysts expect PayPal’s earnings per share to grow by 71% this year, before rising at an average annual rate of 20.43% over the next five years.
Therefore, the stock could be a compelling option for long-term growth investors.
Source – TradingView
Technically, PayPal shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has plunged into the oversold conditions of the 14-day RSI.
Therefore, investors could target potential rebound profits at about $194.27, or higher at $206.40. On the other hand, $173.23 and $160.80 are crucial support zones.
In summary, the recent decline in PayPal stock price presents an exciting opportunity to pounce on its growth story.
The post PayPal stock prediction after being tipped to replace credit cards by the Kansas City Fed appeared first on Invezz.
