PayPal Faces Analyst Downgrade Amid Slow Checkout Improvements, Explores Banking Venture
Morgan Stanley downgraded PayPal (PYPL) to Underweight, citing sluggish progress in branded checkout upgrades. Analyst James Faucette noted integration complexities are delaying measurable user growth, triggering a 1% intraday drop. The payment giant's stock has declined 2% this week as markets price in lower EPS expectations.
Separately, PayPal filed applications with Utah and FDIC regulators to establish a business-focused bank. The proposed entity WOULD target small-business lending—a strategic pivot as core payment growth falters. Wall Street remains skeptical, with multiple firms maintaining bearish ratings amid intensifying fintech competition.