Analyst: PayPal Stock at Risk of "Transition Year"

There's plenty of optimism to unwind that could weigh on the stock

Jake Scott

Deputy Editor

Dec 6, 2023 at 9:28 AM

PYPL

PayPal Holdings Inc (NASDAQ:PYPL) is slightly lower in premarket trading after Bank of America downgraded the online payments firm to "neutral" from "buy," saying new CEO Alex Chriss could put the company at risk of a "transition year." The analyst also cut its price target to $66 from $77.

There's room for a further unwinding of analyst optimism. Coming into today, 20 of 36 covering brokerages rated PYPL a "buy" or better. The equity is also overdue for more price-target cuts, given its 12-month consensus target price of $74.63 stands at a 28.9% premium to last night's close.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day call/put volume ratio of 5.72 ranks higher than 98% of readings from the past 12 months. In other words, a sentiment shift there could also hurt PYPL.

PayPal stock is already down nearly 20% in 2023, and is not too far off from its October annual lows around the $52 mark. The security is also testing support from its 60-day moving average.

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