HSBC has moved PayPal (NASDAQ:PYPL) from a Buy rating to Hold and cut its 12-month price objective to $47.00 from $72.00, reflecting lowered conviction that the payments firm can quickly halt or reverse market share erosion in e-commerce. The new target implies roughly 13% upside from PayPal’s then-current trading level, according to the firm.
PayPal’s stock has fallen sharply in recent trading, dropping nearly 23% over the prior week and changing hands at $41.70, a level close to the 52-week low of $41.43. The downgrade follows the company’s disclosure of a pronounced deceleration in branded checkout volumes during the fourth quarter of 2025 and the appointment of a new chief executive to steer operational improvements.
Data from InvestingPro indicates that 11 analysts recently revised down their earnings estimates for PayPal, a signal of broader market concern about the company’s near-term revenue and profitability trajectory. In its review of PayPal’s Q4 2025 earnings call, interim CEO Jamie Miller outlined plans aimed at lifting the core branded checkout business by enhancing customer experience, presentment, and selection. Miller also emphasized the incoming CEO Enrique Lores’ track record leading large-scale business turnarounds as part of the recovery effort.
Despite those management moves, HSBC warned that prompting significant increases in consumer and merchant engagement "will not be easy and, at minimum, will take time." The firm highlighted several indicators of uncertainty, including PayPal’s 2026 guidance, the withdrawal of 2027 guidance, and the absence of a stated timeline for when branded checkout volumes might meaningfully inflect.
As a result of these factors, HSBC materially lowered its adjusted net income and free cash flow forecasts for PayPal. The bank’s revised target price sits well above current levels but represents a substantially reduced valuation compared with its prior forecast.
Other brokerages and research shops have also adjusted their views amid the company’s slowdown and management transition. PayPal reported branded checkout growth of 1% year-over-year in Q4 2025, a weaker result that prompted Citizens to drop its rating from Market Outperform to Market Perform. Canaccord Genuity downgraded the stock from Buy to Hold and cut its target to $42.00, citing a shift in outlook despite noting PayPal’s strong cash flow generation.
Compass Point moved in the opposite direction on rating but retained a cautious stance - upgrading PayPal from Sell to Neutral while setting a $51.00 price target that reflects short-term uncertainty during the CEO transition. TD Cowen trimmed its target to $48.00 from $65.00 and maintained a Hold rating, pointing to execution headwinds and a difficult fiscal 2026 outlook. William Blair reiterated a Market Perform view, flagging challenges across the traditional fintech segment and referencing PayPal’s abrupt downgrade to its own financial outlook.
Taken together, these analyst moves and the company’s operational signals portray a business in transition, adjusting guidance, and facing execution risk as it attempts to reverse softer branded checkout trends and reengage merchants and consumers.