February 22, 2021 BARRON’S 11
PREVIEW
LOOKING PAST THE PANDEMIC
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Monday 2/
Cadence Design Systems,Inger-
soll Rand,SBA Communications,
andWilliams Cos.report quarterly
results.
The Conference Boardreleases its
Leading Economic index for January.
Consensus estimate is for a 0.3%
month-over-month increase, matching
the December gain. The index has
risen every month since this past
April, but the rate of growth slowed
markedly in the final months of 2020.
The Federal ReserveBank of Dallas
releases its Texas Manufacturing Out-
look Survey for February. Consensus
estimate is for a 10 reading, above
January’s seven figure. Any number
above zero indicates that the region’s
manufacturing sector is growing.
Tuesday 2/
Bank of Montreal,Bank of Nova
Scotia,CBRE Group,Home Depot,
Intuit,Medtronic,Pioneer Natural
Resources, andSquarereport
earnings.
Apple, the world’s largest company
by market cap, holds its annual
shareholders meeting virtually.
Wednesday 2/
Lowe’s,NetApp,Nvidia,TJX Cos.,
andViacomCBSannounce quarterly
results.
The Census Bureaureports new-
home sales for January. Expectations
are for a seasonally adjusted annual
rate of 850,000 homes sold, slightly
higher than December’s figure. New-
home sales, while still strong, are off
their post-financial-crisis peak of
nearly a million set last July.
Thursday 2/
American Tower,Anheuser-
Busch InBev,Autodesk,Best Buy,
Canadian Imperial Bank of Com-
merce,Carvana,Dell Technolo-
gies,Etsy,HP Inc.,Moderna,NRG
Energy,Salesforce.com,Toronto-
Dominion Bank,VMware, and
Workdayreport earnings.
The Bureau of EconomicAnalysis
reports its second estimate for
fourth-quarter gross domestic prod-
uct. Economists forecast a seasonally
adjusted annual growth rate of 4%,
unchanged from the advance esti-
mate reported in late January.
The National Associationof Real-
tors releases its Pending Home Sales
index for January. Consensus esti-
mate is for a 1.5% month-over-month
decline. Pending home sales have
fallen for four consecutive months.
Friday 2/
DraftKings,EOG Resources,Lib-
erty Media, andPublic Enterprise
Grouphold conference calls to dis-
cuss quarterly results.
The BEA reportspersonal income
and spending for January. Expectations
are for a 9.9% monthly gain in income,
after a 0.6% rise in December. Con-
sumption is seen rising 2.3%, after de-
clining 0.2% previously.
Coming Earnings
Consensus Estimate Year ago
MBoiseCascade (Q4) $1.08 $0.
Cooper Tire& Rubber(Q4) 0.92 1.
ExtraSpace Storage (Q4) 1.35 1.
IngersollRand (Q4) 0. ....
Palo Alto Networks(Q2) 1.43 1.
Realty Income(Q4) 0.84 0.More Earnings on Page M36.Consensus Estimate
Day Consensus EstLast Period
M January LeadingIndicator 0.25% 0.30%
T February ConsumerConfidence 90.0 89.
W January NewHome Sales 850,000 842,
TH January Durable Orders 0.95% 0.47%
Q4 GDP 4.0% 4.0%
F January PersonalIncome 9.9% 0.6%February Michigan Sentiment - f 80.5 76.
Unless otherwiseindicated, times are Eastern. a-Advanced;
f-Final; p-Preliminary; r-Revised Source: FactSetFor more informationabout coming economic reports- and whatthey mean- go to Barron’s free Economic
Calendar at http://www.barrons.com
Lodging website Airbnb reports fourth-quarter and
full-year 2020 results. The company’s shares have
risen nearly threefold since its December IPO and
is valued at more than the five largest U.S. hotel brands combined.
Thursday
PayPal Passes
Mastercard................................
Investors can’t get enough ofPayPal Holdings. Its shares
have rocketed 23% this year, to $306, for a market value of
$339 billion.MastercardandVisa, the two big card-pro-
cessing stocks, have been hurt by lower payment volumes
during the pandemic, particularly in highly profitable
cross-border transactions. Both are slightly down over 52
weeks. Mastercard’s stock, at $335, was worth $332 billion.
In a strategy presentation this past week, PayPal saw
nearly every facet of its business doubling over the next five
years: 750 million active accounts by 2025, up from 377 mil-
lion, payments volume of $2.8 trillion and more than $
billion in revenue, up from an estimated $26 billion this year,
better operating margins and earnings, and $40 billion in
free cash flow, 30% to 40% for share repurchases.
MoffettNathanson’s Lisa Ellis notes that PayPal has step-
ping stones to reach those numbers. One is a new service
called Buy Now Pay Later, an interest-free installment plan
with $750 million of transaction volume in the fourth quar-
ter. Another is cryptocurrencies. Users can buy and store
them on PayPal’s app, and PayPal wants to use crypto with
merchants; Bitcoin’s rise seems to be driving greater usage.
The company also aims to expand its Venmo service for
business payments and grow its contactless payments tech-
nology in stores.
Does this warrant a steep premium to Mastercard? The
card giant’s revenue and EPS should exceed PayPal’s in fis-
cal 2021, says Ellis. But the five-year outlook favors PayPal.
Is PayPal’s valuation too rich? At 67 times estimated 2021
earnings, the stock is pricier than the S&P 500’s 23 multiple
or Mastercard’s 42. But PayPal keeps rising.—Daren Fonda
Payments Plays
PayPalhasoutpacedMastercard
throughout the pandemic.
Sources: FactSet; PayPalARisingTide
PayPal believes its total payments
volume will triple over the next five
years, growing at a compounded
annual rate of 25%.
PayPal and Mastercard Shares,
Last 12 Months
PayPal Estimates of Total
PaymentsVolume,2020to
PayPalMastercard’0100200%2020 ’21 ’22 ’23 ’24 ’010002000$3000 BilIllustration by Elias Stein