PayPal stock receives a downgrade from the Bank of America

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on Dec 6, 2023
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  • Bank of America analyst downgraded PayPal on Wednesday.
  • Jason Kupferberg expects 2024 to be a transition year for PYPL.
  • PayPal stock has gained about 20% over the past five weeks.

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PayPal Holdings Inc (NASDAQ: PYPL) has gained nearly 20% over the past five weeks but a Bank of America analyst is not too excited about the digital payments stock for 2024.

BofA analyst shares view on PayPal stock

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On Wednesday, Jason Kupferberg downgraded the financial technology giant to “neutral”. But his $66 price target still suggests about a 10% upside from here.

PayPal recently appointed Jamie Miller its Finance Chief shortly after naming Alex Chriss its next Chief Executive Officer. According to the BofA analyst:

We see `24 as a transition year, as new CEO/CFO seek to earn Street credibility while driving sustained improvements in top-line metrics, especially transaction profit growth, which will likely take time.

Note that PayPal stock is currently down more than 30% versus its year-to-date high.

Why else did he downgrade PayPal stock?

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Jason Kupferberg turned somewhat dovish on the Nasdaq-listed firm today also because the Street expectations are “too high” for 2024.

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The Bank of America analyst agreed in his research note on Wednesday that PayPal remains a “strong brand” with a solid balance sheet but said its shares will still be rangebound in the near term “with valuation/sentiment providing downside support”.

Also on Wednesday, Kupferberg downgraded Toast Inc as well citing rising competition and easing top-line momentum. In the finance space, names he likes include Capital One Financial, Jack Henry & Associates, and Discover Financial Services.

He upgraded all three to “buy” in his research note this morning.

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