Monness Crespi Hardt Downgrades PayPal to Neutral, Citing Estimate Risk and Macro Concerns

Core Viewpoint - Monness, Crespi, Hardt downgraded PayPal from Buy to Neutral due to concerns regarding earnings expectations and the broader consumer environment [1] Group 1: Earnings Expectations - The firm believes that current calendar-year 2026 estimates for PayPal have not been sufficiently reduced [2] - Analysts noted less encouraging intra-quarter commentary and longer-than-expected ramp timelines [2] Group 2: Consumer Environment - There is growing macroeconomic weakness among lower-income U.S. consumers, who represent approximately 90% of consumers but account for about 50% of total spending [2] Group 3: Investment Opportunities - Analysts suggested that more attractive entry points for PayPal stock could emerge in the future [3] - The firm reflected that profits might have been better realized earlier during the stock's rally due to "low-hanging fruit" initiatives [3] Group 4: Competitive Landscape - While the erosion of PayPal's competitive moat has slowed under CEO Alex Chriss, the recent initiatives do not necessarily indicate a widening moat [3]