- Evercore ISI analyst David Togut names PayPal (PYPL +2.0%) top 2021 payment stock pick as the fintech benefits from acceleration of digital payments triggered by the COVID-19.
- "Potential new marketplace wins could offset the headwind from the end of eBay operating agreement," Togut writes in a note to clients.
- He points to the launch of its crypto service and the introduction of QR codes that will allow consumers to use PayPal at large national retailers in-store.
- Rates PYPL Outperform with a $312 price target.
- See how PayPal ratings compare with the rest of Togut's top five payment picks for 2021:
- Togut names Square (SQ +0.4%) the No. 2 payment stock pick for next year, citing the combination of its Seller ecosystem for micro and small to mid-size merchants and its popular Cash App digital wallet and banking app.
- "2021 catalysts include integration of the Cash App & Seller ecosystems, a potential second government stimulus, and SQ’s usage of its banking license to introduce new products," Togut writes.
- Rates SQ Outperform with a $300 price target.
- Square stock far outpaces its payment rivals and the S&P 500 in the past year:
- FIS (FIS -0.8%) comes in third on Togut's list as its transformational Wordpay acquisition "should accelerate FIS' organic revenue growth from a COVID-pressured 1% in 2020 to at least high single digits in 2021, sustaining in 2022 and beyond."
- "FIS enjoys a superior market position in the regional and Tier 1 bank outsourcing space, evidenced by recent long-term core processing contract wins with 4 of the top 30 US banks by assets," he writes.
- Rated FIS Outperform with a $193 price target.
- Rounding out the top five picks are Global Payments (GPN +1.1%) and Fiserv (FISV +0.6%).
