Futures slip, bank earnings ahead, Powell to speak - what’s moving markets
Investing.com - Goldman Sachs downgraded PayPal (NASDAQ:PYPL) from Neutral to Sell on Monday, setting a price target of $70.00. The fintech giant, currently valued at $66.7 billion, maintains a "GOOD" financial health rating according to InvestingPro analysis, with a perfect Piotroski Score of 9 indicating strong operational efficiency.
The downgrade comes as Goldman Sachs identifies several transaction margin headwinds facing PayPal in the coming year, including continued interest rate pressures, the lapping of reacceleration in credit products, and the lapping of targeted repricing benefits in Braintree.
Goldman Sachs also expressed concerns about PayPal’s branded checkout growth potential, citing softer trends in Germany, tariff and de minimis related disruptions in the United States, and ongoing competition from alternative wallet formats.
The investment bank projects approximately 3% transaction margin growth for PayPal in 2026, below the current consensus estimate of about 5%, suggesting a potential valuation de-rating as competitive concerns in e-commerce persist.
This outlook represents a shift from previous expectations that PayPal would achieve stronger branded growth rates by the end of the year, aligning with the acceleration path outlined at its investor day.
In other recent news, PayPal Holdings Inc. has announced a new advertising platform called PayPal Ads Manager, aimed at helping small businesses create their own retail media networks. This tool is expected to launch in early 2026, initially in the United States, followed by the UK and Germany. Meanwhile, Citizens has maintained its Market Outperform rating and a $100 price target for PayPal, citing the potential of its advertising business as a promising revenue stream. However, Wolfe Research has downgraded PayPal’s rating to Peerperform, with a year-end 2026 fair value range of $70-$80, based on future earnings projections.
Additionally, PayPal is offering U.S. customers 5% cash back on Buy Now Pay Later purchases through December 2025 and is introducing a Pay Monthly option for in-store purchases. This feature will be available in most U.S. states, providing more payment flexibility for consumers. In another development, PayPal plans to invest $100 million in startups across the Middle East and North Africa, aiming to expand its presence in these emerging markets. The investment will be channeled through minority investments, acquisitions, and PayPal Ventures funding. These initiatives reflect PayPal’s strategic efforts to broaden its services and market reach.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.