PayPal stock slides as Redburn downgrades on weak e-commerce trends
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PayPal (NASDAQ:PYPL) shares are dipping 2.6% in early Friday afternoon trading, as Redburn analyst Fahed Kunwar cut the payments giant to Neutral from Buy as poor e-commerce trends pose a risk to its earnings. 
"With the recent turn in e-commerce data [in U.S. and Europe] it is hard to see how the downgrades do not carry on," Kunwar wrote in a note to clients. "In this environment, PayPal will struggle to perform."
Another concern is the Buy Now, Pay Later space is expected to "fall sharply," as rising interest rates are triggering higher funding costs in a move that will squeeze the margins of PayPal (PYPL) and other BNPL providers, including Affirm (AFRM) and Klarna (KLAR), the note said. 
During the peak of the BNPL space last year when interest rates were at historical lows, PayPal's (PYPL) stock rallied after the use of its BNPL option surged nearly 400% Y/Y on Black Friday. 
SA's Quant Rating, meanwhile, warned investors that PayPal (PYPL) stock is at high risk of performing badly due to decelerating momentum and declining growth. The consensus for its 2022 EPS is $3.89, a Y/Y decrease of 15.36%. Despite the gloomy outlook, the Average Wall Street Analyst views PYPL as a Buy (25 Strong Buy, 11 Buy, 12 Hold, 1 Strong Sell). 
Take a look at why SA contributor Daniel SchÃ¶nberger is bullish on PayPal.