PayPal shares sink on CEO exit, disappointing 2026 profit forecast

Core Viewpoint - PayPal has replaced its CEO Alex Chriss amid slowing growth and increased competition, leading to a significant drop in its stock price by 19% following a disappointing profit forecast for 2026 [1][4]. Company Changes - Enrique Lores, previously the president and CEO of HP, has been appointed as the new president and CEO of PayPal, with Jamie Miller serving as interim CEO until Lores officially takes over on March 1 [2][1]. - The board expressed that the pace of change and execution under Chriss did not meet their expectations [1]. Financial Outlook - PayPal's adjusted profit forecast for the full year is expected to range from a low-single-digit percentage decline to a slight increase, contrasting with Wall Street's expectation of approximately 8% growth [4]. - The company has decided to provide forecasts on a yearly basis rather than committing to a long-term outlook, indicating a shift in strategy [4]. Market Conditions - The company is facing challenges due to weakening retail spending as consumers, affected by high interest rates and living costs, are prioritizing essential purchases over discretionary spending [5]. - PayPal's revenue for the holiday quarter was reported at $8.68 billion, falling short of analysts' expectations of $8.80 billion [6]. - The adjusted profit for the same period was $1.23 per share, also below the anticipated $1.28 [7]. Strategic Considerations - Analysts have raised concerns regarding the company's turnaround strategy following the unexpected CEO change, questioning whether Lores will build a strong payments team or consider strategic asset reviews [3].