PayPal’s stock continues to face significant headwinds. A recent warning from the company’s finance chief regarding a slowdown in its core business has triggered a fresh wave of analyst downgrades, pushing the share price toward its yearly low and intensifying concerns over sustained growth challenges.
Analyst Sentiment Sours After Guidance
The market’s reaction to cautious comments from CFO Jamie Miller was swift and severe. This week, multiple Wall Street firms moved to lower their price targets for the digital payments giant. The collective action underscores a growing apprehension that the deceleration in PayPal’s branded checkout business—where users pay via the familiar PayPal button—is more pronounced than previously anticipated.
Notable adjustments include:
* Compass Point reduced its target to $56 from $66, maintaining a Sell rating.
* Wells Fargo cut its objective to $67 from $74.
* Evercore ISI lowered its expectation to $65 from $75.
* JP Morgan, which had already downgraded the stock to Neutral, significantly reduced its target to $70 from $85.
Market observers, such as KBW’s Sanjay Sakhrani, noted the projected slowdown appears “somewhat more severe than previously thought,” expressing concern over the ongoing sensitivity of transaction volumes to a weak macroeconomic climate.
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CFO’s Comments Spark Investor Concern
The catalyst for the renewed pessimism was an appearance by CFO Jamie Miller at the UBS Global Tech & AI Conference in early December. Miller prepared investors for a notable cooling in the critical branded checkout segment. While this unit posted currency-adjusted growth of 5% in the third quarter, management signaled a decline of several percentage points for the current fourth quarter, implying a growth rate of just 2-3%.
Company leadership attributed the pressure primarily to macroeconomic challenges, citing consumer caution and a decline in average order values. The shares, which have lost nearly 39% of their value since the start of the year, now trade at €51.24, hovering just above the 52-week low of €50.41.
Strategic Reinvestment to Impact Future Margins
Despite the sobering revenue outlook, Miller reaffirmed the company’s fourth-quarter non-GAAP earnings per share guidance of $1.27 to $1.31. However, she also outlined a strategic shift with implications for future profitability. PayPal intends to aggressively reinvest a portion of its profits to enhance product engagement and customer loyalty.
This initiative, which will begin drawing on transaction margins in Q4, is expected to result in slower earnings-per-share growth in 2026 compared to 2025. The company is consciously accepting near-term margin pressure to bolster its long-term competitive position—a trade-off that the market is viewing with skepticism amid the current share price weakness.
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