PayPal Stock Downgraded To Sell. Goldman Sachs Sees Margin Pressure Ahead.

Core Viewpoint - Goldman Sachs downgraded PayPal Holdings (PYPL) to sell from neutral, citing potential transaction margin pressure in 2026, despite a rise in PayPal stock due to a broader market rebound [1] Group 1: Stock Performance - PayPal stock increased by 0.8% to $70.45 in early trading, following a 7.8% decline on the previous Friday, and has retreated 19% in 2025 [1] - The stock holds an IBD Composite Rating of 58 out of a best-possible 99, indicating it is below the threshold for top growth stocks [4] Group 2: Earnings Expectations - PayPal's Q3 earnings report is scheduled for October 28, with analysts lowering expectations due to a temporary service disruption in Germany [2] - Analysts are particularly focused on branded checkout total payment volume growth as a key metric for the Q3 report [2] Group 3: Business Evolution and Future Guidance - PayPal has transitioned from an online checkout option to a mobile shopping and person-to-person payments app, expanding into e-commerce and buy now, pay later consumer loans [3] - Preliminary guidance for 2026 may be provided during the Q3 earnings call, with concerns that gross profit growth may struggle to exceed 2% to 3% in the coming years [3]