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Investing.com -- Goldman Sachs downgraded PayPal Holdings Inc to Sell on margin pressures and a slower growth trajectory for 2026, with a price target of $70.
The bank said PayPal faces multiple headwinds next year, including continued interest rate pressures, the winding down of prior credit product tailwinds, and the fading benefits from targeted repricing in Braintree.
Goldman Sachs also highlighted challenges in accelerating branded checkout adoption, particularly in Germany and amid U.S. tariff and de minimis disruptions, alongside ongoing competition from rival digital wallets.
“Without an acceleration in the core business, the lapping of several discrete tailwinds in 2026 and continued rate headwinds are likely to lead to transaction margin growth below current consensus,” the analysts wrote.
Goldman now projects 2026 transaction margin growth of around 3%, compared with a street forecast of roughly 5%.
The brokerage also flagged rising operating expenses as PayPal leans into marketing initiatives, citing a recent 5% promotional push on buy-now-pay-later products. Goldman expects this to weigh further on earnings per share, seeing risk skewed to the downside.
The downgrade comes amid a broader reassessment of tech and payments names, with Goldman noting investor caution into fourth-quarter earnings following a roughly 5% decline in average stock coverage since recent results.
The bank also downgraded Marqeta Inc to Sell, while identifying a handful of names where short-term outlooks remain constructive, including FIS, Tost, and Globe Life.
Goldman’s downgrade underscores growing investor concern over margin pressures and decelerating growth in digital payments, ahead of 2026.