Atlantic Equities analysts downgraded PayPal (NASDAQ:PYPL) to Neutral, reducing the firm's price target on the stock to $72 in a note to clients Tuesday.
They believe key challenges are set to continue for PayPal and, as a result, they have decided to move to the sidelines.
"We had previously expected top line growth stabilisation, resilient earnings growth and below-market valuation to enable PayPal's stock to outperform, but these factors have been more than offset by ongoing competition concerns," they explained.
The analysts also believe PayPal's checkout market share overhang will continue, its unbranded margin drag is ongoing, and while its valuation is undemanding, it could remain rangebound.
"There look to be no quick fixes to PayPal's branded market share or transaction margins, making it tough to see what actions will reignite investor interest in the stock near-term, even from new leadership, so we move to the sidelines with a Neutral rating," the analysts concluded.