Monness, Crespi, Hardt downgraded PayPal (NASDAQ: PYPL) from Buy to Neutral, citing concerns around earnings expectations and the broader consumer environment.
The firm said it continued to see the long-term bull case for PayPal as intact, but believed current calendar-year 2026 estimates had not been reduced enough. It also pointed to less encouraging intra-quarter commentary, longer-than-expected ramp timelines, and growing macroeconomic weakness among lower-income U.S. consumers, who represent roughly 90% of consumers but account for about 50% of total spending.
The analyst said these factors suggested more attractive entry points for the stock could emerge. The firm also reflected that profits might have been better taken earlier, when shares rallied on what it described as “low-hanging fruit” initiatives such as improved Venmo monetization and pricing resets in PayPal’s PSP business during 2024 and 2025. While Monness acknowledged that the rate of competitive moat erosion had slowed under CEO Alex Chriss, it said those initiatives did not necessarily signal a widening moat.
