On its earnings release, PayPal noted its new BNPL product has proven to be the fastest launch for the company ever. Rival Klarna highlighted 15m customers, up 4m from November.
It’s a double-edged sword for locals Afterpay and Zip Co, the broker suggests. On the one hand it underscores a large addressable market offering growth, but on the other hand competition, particularly from a big player like PayPal.
The broker sees Zip as relatiely more exposed given a lack of scale relative to Afterpay. Neutral and $6.50 target retained on Zip.
Sector: Diversified Financials.
Target price is $6.50.Current Price is $8.04. Difference: ($1.54) – (brackets indicate current price is over target). If Z1P meets the Citi target it will return approximately -24% (excluding dividends, fees and charges – negative figures indicate an expected loss).