PayPal Holdings Inc. surged past market expectations in the second quarter of 2026, prompting multiple brokerages to upgrade price targets on the stock. Freedom Broker raised its target to $72 from $60, maintaining a buy rating, while Deutsche Bank reiterated a hold rating with a $45 target.
The company reported adjusted earnings per share of $1.38, a 1% decline from the prior year but an 8% beat over the $1.28 consensus estimate. Revenue totaled $8.68 billion, up 5% year-over-year and 2% above the $8.47 billion forecast. Total payment volume rose 9% in constant currency to $486 billion, while brand-owned payments growth stabilized at 2% for a second consecutive quarter.
Freedom Broker cited improving operational trends and potential acquisition synergies as key drivers for the upgraded target. Mizuho also raised its target to $60 from $50, while Morgan Stanley adjusted its forecast to $45 from $34, applying an 8x price-to-earnings multiple based on estimated 2027 adjusted EPS.
PayPal’s valuation metrics reflected a price-to-earnings ratio of 11.65 and a PEG ratio of 0.79, with InvestingPro classifying the company’s financial health as "GOOD" and noting the stock as undervalued relative to its fair price. The company’s operating margins continued to compress due to increased investments in technology, marketing, and product development as part of its ongoing restructuring plan.
Management raised full-year guidance following the quarter, reinforcing confidence in the transformation strategy. The plan focuses on three core segments: financial services, Venmo, and Braintree, with the latter two platforms highlighted as key growth drivers amid shifting consumer payment preferences.
