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PayPal could still underperform expectations despite a reset with a new chief executive, according to MoffetNathanson. The firm downgraded PayPal stock to market perform from outperform in a Monday note, and lowered its price target to $75 per share. MoffetNathanson’s forecast implies roughly 17% upside from Friday’s $64.21 close. PayPal stock has slipped nearly 10% from the start of the year and was off 1.4% in premarket trading Monday. PYPL YTD mountain PayPal stock. Analyst Lisa Ellis says that despite the potentially promising fresh start for the company with new chief executive and former Intuit CEO Alex Chriss on Sept. 27 , PayPal will still underperform MoffetNathanson estimates. ” Looking forward, unfortunately, we expect PayPal’s gross profit growth to remain lackluster, in the low- to mid-single digits, and we see the potential for further downside to our estimates, particularly given the strong momentum of Apple Pay, which we worry will begin to benefit from the powerful network effects in payments,” Ellis said. Ellis added that additional headwinds related to weak growth from Venmo as well as a dwindling set of opportunities for the company to lower operating expenses will frustrate PayPal in the near term. “As a result, while we are excited for the fresh start at PayPal under new CEO Alex Chriss, we believe it will, unfortunately, likely continue to be a challenging road ahead for the company in the coming year,” she said. — CNBC’s Michael Bloom contributed to this report.
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