PayPal, Fiserv shares slip following downgrade to Hold at Jefferies on limited upside
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Shares of fintech platforms PayPal (NASDAQ:PYPL)
-1.8% and Fiserv (NASDAQ:FISV)
-1.5% drift lower in pre-market trading after Jefferies analyst Trevor Williams downgrades the stocks to Hold from Buy.
With regards to PayPal (PYPL), while the stock price is already off nearly 40% from its July 2021 record peak, Williams thinks there is still limited potential for price/earnings multiple expansion. The stock has a 42x trailing twelve month P/E ratio vs. 25.4x for the sector median. Check out PayPal's D+ rated Valuation Grade here.

Note that PYPL has a 70% price cushion from pre-pandemic levels, and soars nearly 365% in the past five years.
On a macro basis, the analyst points out that ecommerce trends will continue to deteriorate as competition intensifies. He notes that consumer spending has migrated to brick and mortar retail with the economy reopening last year - further setting back ecommerce spending.
Jefferies' Hold rating aligns with the Neutral Quant Rating, with the best rated factor grade in Profitability, and disagrees with the Bullish Wall Street Analysts Rating (27 Very Bullish, 13 Bullish, 5 Neutral, 1 Bearish, 1 Very Bearish).
Similarly, Williams cuts Fiserv (FISV) on limited potential upside for the stock price. Still, shares of FISV are down about 15% from its all-time high in April and off 5% on a Y/Y basis. Look at FISV's C+ Momentum Grade, which appears to have been losing steam since a year ago.
The Hold rating agrees with the Neutral Quant Rating and diverges from the Bullish Wall Street Analysts Rating (18 Very Bullish, 7 Bullish, 6 Neutral).
Previously, (Jan. 10) PayPal and Visa got downgraded at BNP Paribas.