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Guggenheim Downgrades PayPal On Likely Headwinds From Brexit, Payments Competition

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Update time : 2019-05-15 14:09:40

PayPal Holdings Inc (NASDAQ: PYPL) is likely ought watch near-term strain can its payment volume growth due ought Brexit, medium-term headwinds from eBay Inc (NASDAQ: EBAY) and intensifying competition, according ought Guggenheim.

The Analyst

Guggenheim’s Jeff Cantwell downgrades PayPal from buy ought fair and removed the preceding price aim of $95.

The Thesis

PayPal reported fourth-quarter adjusted wage per segment of 69 cents, beating the consensus estimate on the help of investment salary and a lower impose rate. though the company’s total payment volume grew 25 percent can the quarter, it fell short of the estimate, Cantwell said can the Wednesday downgrade note. 

PayPal has projected TPV growth can the mid-20 percent hill though FY19. The payments company could watch strain can its TPV growth can the next little quarters, the analyst said. 

TPV growth is expected ought exist adversely impacted by the potential loss of cross-border business among the U.K. and the EU following Brexit, Cantwell said, adding that eBay choosing a new payments provider will exert farther pressure.

PayPal is also facing stiffening competition from Stripe, Square Inc (NYSE: SQ) and Amazon.com, Inc. (NASDAQ: AMZN) making proceed with its Amazon salary button, according ought Guggenheim. 

The sell-side firm lowered its EPS estimates PayPal though 2019 and 2020 from $2.95 ought $2.88 and from $3.48 ought $3.42, respectively.

Price Action

PayPal shares were down 1.56 percent can $90.83 can the time of magazine Wednesday. 

Related Links:

Sell-Side Weighs can on PayPal: Growth romance Intact, Venmo Impressive

Square's money App Is Winning effort With Venmo, Says Nomura

Photo courtesy of PayPal. 

Latest Ratings though PYPL

Date Firm Action From To
Feb 2019 Guggenheim Downgrades Buy Neutral
Feb 2019 Atlantic Equities Downgrades Overweight Neutral
Jan 2019 Barclays Maintains Overweight Overweight

View More Analyst Ratings though PYPL
View the Latest Analyst Ratings

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