PayPal (PYPL) Stock Downgraded as Mizuho Flags X as a Real Threat

TLDR

• Mizuho downgraded PYPL from Outperform to Neutral, cutting its price target from $60 to $50
• The firm cited X (formerly Twitter) as a direct competitor threatening PayPal and Venmo’s P2P and digital wallet business
• Analyst consensus sits at Hold with an average price target of $56.61 across 45 analysts
• PayPal missed Q4 EPS estimates ($1.23 vs $1.29 expected) and revenue came in below forecasts at $8.68B
• Insiders sold over 87,600 shares worth ~$3.8M in the past three months, alongside multiple active securities-fraud lawsuits

PayPal has had a rough stretch, and Mizuho just made it a little rougher.

The firm downgraded PYPL from Outperform to Neutral on Thursday and cut its price target to $50 from $60. The stock was trading at $49.57 at the time, meaning Mizuho’s new target implies just 0.87% upside from current levels.

PayPal Holdings, Inc., PYPL

The core of Mizuho’s concern is competition. Specifically, the firm called out X — Elon Musk’s social platform — as a direct threat to both PayPal and Venmo in the peer-to-peer payments and digital wallet space.

Mizuho also trimmed its growth expectations for both Venmo and PayPal’s branded checkout services as part of the downgrade.

A Crowded Hold

Mizuho is far from alone in its caution. Of 45 analysts currently covering PYPL, 32 have a Hold rating, seven are at Buy, and six have a Sell. The average price target sits at $56.61.

Other recent coverage tells a similar story. Loop Capital started coverage with a Hold and a $46 target, citing market share loss concerns. BofA Securities initiated with Neutral and a $48 target. Evercore slashed its target from $65 to $40 back in February.

Wells Fargo cut its target from $67 to $48, and BNP Paribas raised its target slightly from $41 to $43.50 — also Neutral.

PayPal’s last earnings report didn’t help sentiment. The company posted Q4 EPS of $1.23, missing the $1.29 consensus. Revenue came in at $8.68 billion against expectations of $8.82 billion, though that was still up 4% year-over-year.

Insider Selling and Legal Pressure

On the insider front, PayPal’s Chief Accounting Officer Chris Natali sold 2,208 shares at $44.73 on March 3rd, cutting his position by nearly 66%. Insider Suzan Kereere sold 13,515 shares the same day at $46.02, reducing her stake by 30%.

In total, insiders have sold over 87,600 shares worth roughly $3.8 million over the past three months.

The company is also dealing with multiple securities-fraud class action lawsuits, with several law firms targeting an April 20 deadline for lead-plaintiff filings. Some filings assert potential personal liability for senior executives.

On the positive side, PayPal recently integrated its Payment Links feature into Canva, giving access to the platform’s 265 million monthly users. PayPal also added Alyssa Henry, former CEO of Square, to its board.

There are also unconfirmed reports that Stripe is in early talks to acquire all or parts of PayPal. Neither company has commented.

PYPL’s 12-month range sits between $38.46 and $79.50. The stock currently trades around $49.57.

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