PayPal Holdings' (PYPL) product improvements within Venmo and the distribution efforts to gain presentment in merchant checkout flows will enable the company to meet its 2027 targets, RBC Capital Markets said in a note Thursday.

RBC said Venmo monetization, enhancements in the Branded checkout product and the Unbranded price to value strategy give the firm "increased conviction" in PayPal's profitable growth story.

The firm said it based its increased confidence in the company on those three drivers and the recent commentary from its management.

"As the company executes on the three strategies... we believe investors will get constructive on the stock and drive multiple expansion on the shares," the firm said.

RBC maintained the company's outperform rating and $88 price target.