Peter Smith
⬤ PayPal Holdings (PYPL) got hit with a downgrade from Buy to Neutral by Monness, Crespi, Hardt. The firm still believes in PayPal's long-term story but thinks expectations for the next couple years need a reality check. They're seeing better buying opportunities on the horizon, even as PayPal pushes forward with operational improvements. Shares closed at $58.14 on January 2, with premarket trading slipping about 0.15% to $58.05.
⬤ The downgrade came down to a few key factors. The firm thinks 2026 estimates haven't been cut enough yet, and they're not loving what they're hearing between earnings reports. Business progress in certain areas isn't moving as fast as hoped. Add in macro worries—specifically weakness showing up among a huge chunk of US consumers who drive most spending—and you've got a setup that doesn't warrant an aggressive Buy rating, even with a solid long-term path still intact.
⬤ The analyst was pretty honest about timing, admitting profits probably should've been taken when the stock rallied on relatively simple operational fixes like boosting Venmo monetization and adjusting payment service pricing. While they credit current leadership with slowing the company's competitive slide, recent improvements don't yet prove PayPal is rebuilding a real competitive advantage. That cautious read is exactly why they moved to the sidelines with a Neutral stance.
Peter Smith
