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PayPal Holdings: Hold Rating Amid Tariff Concerns and Competitive Pressures

PayPal Holdings: Hold Rating Amid Tariff Concerns and Competitive Pressures

Analyst James Faucette from Morgan Stanley maintained a Hold rating on PayPal Holdings (PYPLResearch Report) and keeping the price target at $80.00.

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James Faucette has given his Hold rating due to a combination of factors impacting PayPal Holdings. The sentiment among investors has been predominantly bearish, primarily due to concerns about the impact of tariffs on PayPal’s business, particularly in the discretionary retail goods sector. There are also long-term structural concerns regarding increasing competition from Apple Pay and Shop Pay, especially in international markets.
Despite the stock’s current low valuation, which some investors find appealing, there is skepticism about whether any positive quarterly performance or outlook improvements would have a lasting effect. Additionally, PayPal’s exposure to tariffs and cross-border transactions presents risks, as a significant portion of its gross profit is tied to discretionary eCommerce spending. The company’s fundamentals are seen as vulnerable compared to more diversified payment companies, given its user base’s income levels and potential shifts in spending patterns. However, some of these risks might already be reflected in the stock’s price.

Based on the recent corporate insider activity of 34 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of PYPL in relation to earlier this year.

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