Edward Jones Downgrades PayPal (PYPL) to Hold, Removes from Stock Focus List
Edward Jones analyst Logan Purk downgraded PayPal (NASDAQ: PYPL) from Buy to Hold.
The analyst comments "We are downgrading shares of PayPal to a Hold from a Buy and removing it from the Stock Focus List following weaker quarterly results. PayPal has embraced a strategy shift, focusing on its largest accounts that drive a majority of payment volume across the platform. While this strategy has led to consistent payment-volume growth, other measures have deteriorated for the company. While new account growth was expected to moderate, new accounts have actually shrunk. More importantly, profit per transaction has declined after initially stabilizing in previous quarters. This is largely due to stronger growth in PayPal's Braintree product, which has lower profit margins. We think PayPal-branded products showing slower growth is partly due to increased competitive pressure. Therefore, we have lowered our growth estimates for the company. We think shares reflect our reduced growth outlook and are appropriately valued."
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Shares of PayPal closed at $65.91 yesterday.