Baird and BofA Downgrade PayPal Holdings (PYPL)

Core Viewpoint - PayPal Holdings, Inc. (NASDAQ:PYPL) has been downgraded by both Baird and BofA Securities due to concerns over uneven transaction volumes and slower-than-expected growth in its core business, leading to reduced price targets [1][3]. Group 1: Downgrades and Price Targets - Baird downgraded PayPal from Outperform to Neutral, lowering the price target from $83 to $66, citing "uneven" transaction volumes in Q4 [1]. - BofA downgraded PayPal from Buy to Neutral and cut its price target from $93 to $68, indicating that growth revitalization efforts are slower than anticipated [3]. Group 2: Future Outlook - Baird anticipates another investment cycle for PayPal in 2026, suggesting that a "clearing event" is less likely in the short term due to unclear timing of platform improvements [2]. - BofA's analysis predicts a drop in branded checkout growth in Q4, with 2026 now viewed as an investment year for the company [3]. Group 3: Company Strengths and Risks - Despite the downgrades, BofA recognizes PayPal's base of over 400 million consumer and merchant accounts and views faster innovation under new management positively [4]. - However, BofA believes the risk-reward balance for PayPal currently appears neutral [4].