PayPal (NASDAQ:PYPL) Shares Down 3.4% Following Analyst Downgrade

Key Points

• Shares fell 3.4% after Rothschild & Co Redburn cut its price target from $50 to $32 and kept a sell rating, with trading volume about 13% above the average session.
• Q4 earnings missed — EPS $1.23 vs. $1.29 expected and revenue $8.68B vs. $8.82B — and that miss, plus analyst downgrades and a securities investigation, has intensified negative sentiment toward the stock.
• Despite the pressure, PayPal announced a quarterly dividend of $0.14 per share and remains largely institutionally owned (around 68%), with major funds like Vanguard increasing positions.

PayPal Holdings, Inc. (NASDAQ:PYPL - Get Free Report)'s share price fell 3.4% on Thursday after Rothschild & Co Redburn lowered their price target on the stock from $50.00 to $32.00. Rothschild & Co Redburn currently has a sell rating on the stock. PayPal traded as low as $38.46 and last traded at $39.08. 27,858,478 shares changed hands during trading, an increase of 13% from the average session volume of 24,663,674 shares. The stock had previously closed at $40.46.

PYPL has been the subject of a number of other research reports. Mizuho set a $60.00 target price on PayPal in a research note on Wednesday, February 4th. BTIG Research reissued a "neutral" rating on shares of PayPal in a report on Tuesday, February 3rd. Daiwa Securities Group lowered their target price on PayPal from $61.00 to $42.00 and set a "neutral" rating on the stock in a research note on Tuesday. Dbs Bank upgraded shares of PayPal to a "hold" rating in a research note on Friday, February 6th. Finally, UBS Group reissued a "neutral" rating and set a $44.00 price target on shares of PayPal in a report on Wednesday, February 4th. Ten analysts have rated the stock with a Buy rating, thirty have given a Hold rating and four have assigned a Sell rating to the company. According to MarketBeat, the stock presently has an average rating of "Hold" and an average target price of $61.03.

Insiders Place Their Bets

In other PayPal news, EVP Frank Keller sold 3,478 shares of the company's stock in a transaction on Friday, February 6th. The stock was sold at an average price of $40.20, for a total value of $139,815.60. Following the completion of the sale, the executive vice president directly owned 51,567 shares in the company, valued at $2,072,993.40. This represents a 6.32% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Suzan Kereere sold 4,162 shares of PayPal stock in a transaction that occurred on Wednesday, November 19th. The shares were sold at an average price of $59.84, for a total transaction of $249,054.08. Following the sale, the insider directly owned 30,983 shares in the company, valued at approximately $1,854,022.72. The trade was a 11.84% decrease in their position. The SEC filing for this sale provides additional information. Insiders own 0.08% of the company's stock.

More PayPal News

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: PayPal announced an agentic AI travel partnership with Sabre and Mindtrip to create end-to-end, AI-driven booking and payments experiences — a potential new enterprise and travel vertical revenue stream if adoption scales. Sabre, PayPal, and Mindtrip partner to deliver the industry's first end-to-end agentic AI experience for travel
• Neutral Sentiment: Leadership change and strategic refocus — Enrique Lores will replace Alex Chriss as CEO and the company is pushing embedded payments and automotive use cases; that can reframe growth but raises near-term execution and transition risk. PayPal Shifts Gears With New CEO And Automotive Payments Push
• Negative Sentiment: A securities investigation by Kessler Topaz Meltzer & Check into potential federal securities law violations increases legal and disclosure risk for PayPal and adds investor uncertainty. PYPL Investigation: Kessler Topaz Meltzer & Check, LLP Encourages PayPal Holdings, Inc. NASDAQ: PYPL Investors to Contact the Firm
• Negative Sentiment: Analyst pressure intensified: Rothschild & Co Redburn cut its price target sharply and maintained a sell rating, signaling expectations for further downside and reinforcing bearish sentiment. Rothschild & Co Redburn adjusts price target on PayPal to $32 from $50, maintains sell rating
• Negative Sentiment: Multiple outlets and analysts turned more bearish after the Q4 earnings miss and downward EPS revisions; Zacks highlighted PayPal as a “Bear of the Day” and added PYPL to its Strong Sell list, reflecting cuts to near‑term earnings estimates. Bear of the Day: PayPal (PYPL)
• Negative Sentiment: Independent and sell‑side forecasts (eg. Cantor Fitzgerald, Truist coverage noted in recent reports) are pessimistic on PYPL’s near-term trajectory, reinforcing selling pressure ahead of operational clarity. Cantor Fitzgerald Issues Pessimistic Forecast for PayPal NASDAQ: PYPL Stock Price

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of the stock. Vanguard Group Inc. boosted its position in shares of PayPal by 6.5% during the 4th quarter. Vanguard Group Inc. now owns 90,376,927 shares of the credit services provider's stock worth $5,276,205,000 after acquiring an additional 5,534,462 shares in the last quarter. Capital Research Global Investors grew its position in shares of PayPal by 2.3% during the third quarter. Capital Research Global Investors now owns 27,953,803 shares of the credit services provider's stock worth $1,874,637,000 after acquiring an additional 636,441 shares during the last quarter. Norges Bank acquired a new position in shares of PayPal in the 4th quarter valued at $949,758,000. Artisan Partners Limited Partnership boosted its stake in shares of PayPal by 1.6% during the second quarter. Artisan Partners Limited Partnership now owns 11,992,031 shares of the credit services provider's stock worth $891,248,000 after buying an additional 184,014 shares during the period. Finally, Invesco Ltd. raised its stake in PayPal by 10.9% during the 3rd quarter. Invesco Ltd. now owns 11,131,949 shares of the credit services provider's stock valued at $746,508,000 after acquiring an additional 1,093,365 shares during the last quarter. 68.32% of the stock is currently owned by hedge funds and other institutional investors.

PayPal Trading Down 3.4%

The stock has a market capitalization of $35.98 billion, a price-to-earnings ratio of 7.22, a P/E/G ratio of 1.07 and a beta of 1.43. The company has a fifty day moving average of $55.91 and a two-hundred day moving average of $63.59. The company has a quick ratio of 1.29, a current ratio of 1.29 and a debt-to-equity ratio of 0.49.

PayPal (NASDAQ:PYPL - Get Free Report) last released its quarterly earnings data on Tuesday, February 3rd. The credit services provider reported $1.23 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.29 by ($0.06). The business had revenue of $8.68 billion during the quarter, compared to analysts' expectations of $8.82 billion. PayPal had a return on equity of 25.42% and a net margin of 15.77%.The company's revenue was up 4.0% compared to the same quarter last year. During the same quarter in the previous year, the company posted $1.19 EPS. On average, research analysts expect that PayPal Holdings, Inc. will post 5.03 EPS for the current year.

PayPal Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Wednesday, March 25th. Shareholders of record on Wednesday, March 4th will be issued a dividend of $0.14 per share. This represents a $0.56 dividend on an annualized basis and a yield of 1.4%. The ex-dividend date is Wednesday, March 4th. PayPal's dividend payout ratio is 10.35%.

About PayPal

PayPal Holdings, Inc operates a global digital payments platform that enables consumers and merchants to send and receive payments online, on mobile devices and at the point of sale. The company provides a broad set of payment solutions, including a digital wallet, merchant payment processing, checkout services, invoicing and fraud-management tools. PayPal's platform is designed to support e-commerce, in-person retail and person-to-person transfers, targeting both individual consumers and businesses of varying sizes.

Key products and services in PayPal's portfolio include the PayPal wallet and checkout ecosystem, the Venmo peer-to-peer mobile app, Braintree's developer-focused payment gateway, Xoom for international money transfers, and PayPal Credit and buy-now-pay-later options.

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