PayPal Holdings Inc. (PayPal (PYPL)) just announced its biggest restructuring in years, and Wall Street is taking a measured view. BofA Securities analyst Matthew O'Neill is sticking with a Neutral rating and a $55 price target on the stock, which implies about 9% upside from the current $50.44 share price. He bases that valuation on a 10x multiple of his 2027 EPS estimate of $5.46.
On April 29, PayPal said it would reorganize into three operating segments: Checkout Solutions & PayPal, Consumer Financial Services & Venmo, and Payment Services & Crypto. O'Neill sees the move to bundle Venmo with credit, buy now, pay later, savings, and debit as a big strategic play. He says it positions the unit to compete directly with Cash App and Chime under one profit-and-loss statement.
But restructuring often comes with pain. O'Neill notes that the 15% workforce reduction, which was paused under former CEO Chriss, is likely to happen over the next one to two quarters. He also points to the title of new Chief AI Officer Anshu Bhardwaj, which includes the word "Simplification." O'Neill interprets that as a public cost-reduction mandate, reflecting CEO Lores' prior playbook at HP.
What about Venmo's value? O'Neill estimates Venmo's standalone worth at $5–$6 billion, or 11–13% of PayPal's $45 billion enterprise value, based on multiples from Chime and Cash App. The bundled segment, which includes consumer credit, BNPL receivables, debit interchange, and savings, could be valued at $8–$11 billion — enough to make it a viable standalone public company.
Financially, O'Neill forecasts flat EPS growth in 2026 at $5.31, with modest increases to $5.46 in 2027 and $5.77 in 2028. He projects free cash flow will decline to $4.6 billion in 2026 before partially recovering, and expects operating margins to fall from 18.3% in 2025 to 12.8% by 2028.
Overall, O'Neill sees PayPal's risk and reward as balanced. The company's scale and strong balance sheet help offset competitive pressures, leadership transition risks, and potential AI-driven disintermediation in payments. At the time of publication on Monday, PayPal shares were up 0.12% at $50.50.
