PayPal stock downgraded to Neutral at BofA on strategy pivot, macro headwinds
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Bank of America Securities analyst Jason Kupferberg downgrades PayPal Holdings (PYPL
+4.8%) to Neutral from Buy as the payment tech firm embarks on a strategic pivot and works on newer growth initiatives while facing macro headwinds related to Russia/Ukraine. 
The magnitude of H2 2022 revenue growth acceleration remains unclear and the company's revised guidance for 20% revenue CAGR during the three-year period ending 2025 may be challenging to reach, the analyst said in a note to clients.
"In our view, PYPL's business is not broken. In hindsight, the company overestimated the sustainability of tailwinds induced by the pandemic and related stimulus, but we believe PayPal (NASDAQ:PYPL) retains a robust competitive footprint," Kupferberg said.
He reduced his total payment volume (TPV) growth forecasts for PYPL to 16.7% in 2022 from prior view of 18.8% and to 20.7% in 2023 from 22.9% previously. That pushes his revenue growth estimates down to 13.2% for 2022 from 15.1% prior and 19.4% in 2023 from 21.4%.
Price target is cut to $107 from $175.
PayPal's (PYPL) Quant rating is Sell, and even with some analysts downgrading the stock after its 2022 guidance and customer strategy shift, the average Wall Street rating is still Buy. See PYPL's analyst rating history in the graph below.
SA contributor Envision Research is convinced that PayPal's (PYPL) true price/earnings ratio is even lower than it appears