PayPal (PYPL) Faces Analyst Downgrades Amid Rising Competition and Slower Checkout Growth

PayPal Holdings, Inc. (NASDAQ:PYPL) is one of the best cheap stocks to buy for 2026. On January 28, Rothschild Redburn analyst Dominic Ball downgraded PayPal Holdings, Inc. (NASDAQ:PYPL) from Neutral to Sell and slashed the price target from $70 to $50. Ball cited the increasing competitive advantage of traditional card networks as a primary reason for the pessimistic shift toward the digital payments giant.

Ball specifically highlighted that the marginal consumer is choosing alternative payment methods more often than in the past. He noted that rivals such as Apple Pay, Google Pay, Shopify’s Shop Pay, and Stripe’s Link are winning incremental users away from PayPal’s platform. Also, the analyst pointed out that the e-commerce world is going “agentic” and that in this new landscape, traditional card networks have an edge through stronger pricing power and demand for cyber and risk services.

Later that day, on January 28, Morgan Stanley lowered its price target on PayPal to $50 from $51 and kept an Underweight rating on the stock. The firm cited slower growth in the company’s branded checkout segment. It explained that it trimmed expectations because it reduced its 2026 branded checkout growth forecast to 3.3% from 3.9%.

Morgan Stanley pointed out that PayPal’s progress on upgrading checkout integrations has been slow. The bank noted that only 25% of merchants had moved to the new checkout experience in about 15 months, and of those, only half are using the most optimized integration.

PayPal Holdings, Inc. (NASDAQ:PYPL) operates a digital payments platform that enables consumers and merchants to send, receive, and manage transactions online and through mobile devices. Its services include PayPal, Venmo, and Braintree.

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Disclosure: None. This article is originally published at Insider Monkey.