Shares of PayPal Holdings (NASDAQ: PYPL) declined in morning trading on Monday after Raymond James analyst John Davis downgraded the stock to Hold from a Buy. The analyst has a price target of $107 on the stock implying an upside potential of 28.7% at current levels.
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The analyst has a cautious stance when it comes to PYPL’s Q4 results which are expected to be announced on February 9. Davis believes that the company’s 2023 revenue guidance is likely to indicate that its branded checkout could have a flat or negative growth resulting in the “share loss narrative growing even louder.”
Shares of PYPL have lost more than 30% value in the past year.
Davis is of the opinion that while the company’s management could very well do more cost-cutting measures than its earlier guidance of its FY23 EPS increasing by more than 15%, “the margin trajectory in 2024 and beyond is less clear as cost cuts will be in the rearview mirror and Braintree/unbranded will likely drive the majority of growth.”
Analysts are cautiously optimistic about PYPL stock with a Moderate Buy consensus rating based on 16 Buys, five Holds, and one Sell.
