Can shares of PayPal, which began trading as an independent company last year after its spinoff from eBay, manage to reach its share price target estimated by analysis at $45 a share? According to comments on Twitter and StockTwits, a financial social media platform from back when PayPal first began trading, many thought that this was certainly possible. Right at the beginning, PayPal shares were closing at around $40, valuing PayPal at $49.4 billion. However, currently, PayPal share prices are valued at $35.08, just under $10 less than their share price target for 2016.

Analysts’ Projections
Back in July of last year when PayPal first began trading as an independent company, analysts were generally positive on the stock, with some even saying that the shares could rise to a value of $60. BMO Capital analyst Paul Condra gave PayPal, a financial platform which is so popular that even online casinos that accept PayPal are increasing in number, an outperform rating with a price target of $46. Other trusted analysts from companies such as Baird and SunTrust also gave PayPal very similar ratings, with price targets ranging from $45-46.

What Went Wrong?
Certain analysts believed that the $45 target could be easily reached sooner than 2016. They took into account stronger revenue growth and acquisitions that PayPal could make going forward to display a positive outlook to the stock price target. Max Wolff, chief economist at Manhattan Venture Partners, believed that shares could well continue to rise as PayPal grows in size and popularity. He described the organisation as a ‘great company’, saying that PayPal has real brand equity and solid numbers. But, this year, PayPal’s stock price seems to be on the decline. Over the past year, PayPal’s stock value has reached over $40 per share, but has made a rapid decline in the past weeks.

PayPal’s Future
What does all of this mean for the future when it comes to PayPal’s share value? Experts believe that there is nothing to worry about, as stock values could well be low right now due to a whole number of reasons, for example the recent announcement that the UK is leaving the European Union which saw the value of the pound crash overnight. Experts believe that as a standalone company with no ties to eBay, PayPal can and will continue to grow even faster. Bob Lang, a private trader in equity and option markets, said last year that PayPal has a good chance of partnerships and relationships with other companies, and is a unique property that’s on a growth trajectory, unlike many others in related business. All in all, PayPal is a strong company with very strong management, and has a bright future ahead.

What are your views on the stock value price of PayPal? Are you surprised that a year after the company’s spinoff from eBay, the target hasn’t been reached? Or, do you believe that PayPal simply needs more time? We’d love to hear from you – join the discussion in the comments.

By Boris Dzhingarov

© 2016 Copyright Boris Dzhingarov - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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