PayPal Shares Under Pressure as Analysts Slash Price Targets

PayPal's stock continues to face significant headwinds. A recent warning from Chief Financial Officer Jamie Miller regarding a slowdown in the company's core business during the fourth quarter has prompted major financial institutions to revise their outlooks downward. Wall Street's concern is mounting that the payment giant is losing ground to competitors during the crucial holiday shopping season.

In response to management's commentary on current trends, analysts from Wells Fargo, Evercore ISI, and Compass Point have all adjusted their expectations and price targets within the last 24 hours. The focus of their skepticism is the growth of "Branded Checkout" transactions, where the PayPal name is visible to consumers. This segment is critical for profitability, as it has historically commanded significantly higher margins.

Compass Point has taken a particularly bearish stance, maintaining its "Sell" rating on the shares. The firm cited a depressed valuation coupled with deteriorating growth metrics as key reasons for its pessimistic view.

Core Business Faces Intense Competition

This trend is especially troubling for investors because the "Branded Checkout" service is considered PayPal's primary defense against powerful rivals like Apple Pay and Google Pay. While the company continues to see growth in its unbranded processing business, which includes its Braintree subsidiary, the margins in this area are substantially lower. This ongoing shift in revenue mix is putting increasing pressure on the overall company's profitability.

Should investors sell immediately? Or is it worth buying PayPal?

Market observers view CFO Miller's transparency as a necessary reality check. It suggests that despite growth in the broader e-commerce sector, PayPal may not be capturing its full share of this year's consumer spending surge.

Stock Performance Reflects Deep-Seated Concerns

The persistent uncertainty is clearly visible in the stock's performance. Since the start of the year, the share price has plummeted by almost 38 percent, trading well below its 50-day average of €56.34. Even with a seemingly attractive valuation, the prevailing market fear is that the stock represents a "value trap"—a situation where a cheap-looking equity fails to attract sustained buying interest due to underlying structural issues.

All attention now turns to the official quarterly report scheduled for mid-February 2026. This release will be pivotal in determining whether the current weakness in the core business is a temporary setback or indicative of a more permanent structural challenge. Until evidence of a successful turnaround emerges, the stock is likely to remain highly sensitive to broader market fluctuations.