PayPal Holdings Inc. (PYPL) is heading into its fourth quarter earnings report with at least one Wall Street analyst betting on a revenue surprise. JPMorgan's Tien-tsin Huang expects the payments giant to top consensus revenue estimates while delivering adjusted earnings that meet expectations.
Huang, who maintains a Neutral rating on the stock, isn't exactly throwing a party for PayPal's growth prospects, though. He sees some downside risk in the company's 3% branded checkout growth assumption, which is basically the core of PayPal's business.
The bigger question is whether PayPal can hit management's ambitious target of 8%+ branded growth by 2027. Huang notes this "likely requires material progress on converting merchants to latest checkout integration, in addition to solid returns on investments in Agentic and BNPL flows."
Still, if PayPal executes well, Huang thinks the company could achieve 5% branded checkout growth in 2026, which would beat the Street's 3.5% expectations. That's a meaningful gap if it materializes.
On earnings, the analyst believes PayPal can deliver in-line adjusted results for 2026, assuming the company "maintains a high level of share repurchase spend (93% of FCF) to protect EPS during this investment year."
Shares of PayPal were down 1.08% to $55.99 at the time of publication on Tuesday.
