PayPal Holdings, Inc. (NASDAQ: PYPL) heads into the next U.S. session after a holiday-shortened week and a Christmas Day market closure, with investors balancing a wave of December analyst downgrades against a growing pipeline of longer-term catalysts—most notably PayPal’s push into “agentic commerce” with AI partners and a newly announced bid to establish a U.S. industrial bank. [1]
As of the most recent U.S. trading session (the early close on Wednesday, Dec. 24, 2025), PayPal shares were around $60, leaving the stock well below its 52-week high of $93.25 and modestly above the 52-week low of $55.85 shown on PayPal’s investor quote page. [2]
Below is what matters most for PayPal stock ahead of the Friday, Dec. 26, 2025 market open—including the latest company headlines, Wall Street’s current forecast range, and the near-term checklist traders tend to watch in thin, post-holiday liquidity. [3]
1) Market setup for Dec. 26: holiday schedule, thinner liquidity, and why it matters for PYPL
U.S. markets were closed on Christmas Day (Thursday, Dec. 25, 2025) and closed early on Christmas Eve (Wednesday, Dec. 24, 2025). Regular trading hours for the NYSE/Nasdaq session are typically 9:30 a.m. to 4:00 p.m. ET, and the day-after-holiday session often arrives with lighter volume and wider intraday swings than usual. [4]
That matters for PayPal because PYPL has been trading around a psychologically important area near $60, where small headline-driven flows (an analyst note, a regulatory update, or AI/crypto-related news) can move the stock more than they would on a normal-volume day. [5]
2) Where PayPal stock stands right now: price context and key reference levels
From PayPal’s investor quote snapshot for Dec. 24, PYPL was around $60.04, with the same page listing a 52-week high of $93.25 and 52-week low of $55.85. Put differently, the stock is roughly 36% below its 52-week high and about 7.5% above its 52-week low—useful context for how much of the year’s “reset” is already reflected in the price. [6]
Another reference point many technicians track is the long-term moving average. TipRanks’ technical readout recently cited PYPL’s 200-day simple moving average well above spot price (a condition many trend models treat as a bearish backdrop until reclaimed). [7]
3) The biggest PayPal news to know heading into the open
A) PayPal is seeking to establish “PayPal Bank” in the U.S.—a major strategic swing
The most consequential December headline is PayPal’s move to submit applications to establish PayPal Bank, a proposed Utah-chartered industrial loan company, with applications filed with the Utah Department of Financial Institutions and the FDIC. PayPal positions the move as a way to expand access to financial services for U.S. small businesses and to operate certain lending and deposit-related capabilities more efficiently under a bank framework. [8]
Coverage from the Financial Times framed the effort as part of a broader fintech trend toward charters and noted PayPal has extended tens of billions of dollars of loans over the past decade-plus, while also highlighting that a bank path can reduce reliance on third parties but increases regulatory scrutiny. [9]
Why markets care: if approved, the bank initiative could eventually influence PayPal’s funding costs, product mix, and small-business economics—but approvals can take time, and the process introduces a new category of regulatory headline risk. [10]
B) “Agentic commerce” is becoming PayPal’s core narrative—starting with OpenAI and expanding outward
PayPal has increasingly positioned itself as the payments layer for AI shopping and “agentic commerce,” including a partnership with OpenAI designed to enable PayPal-powered checkout experiences inside ChatGPT and support payments processing for merchants using OpenAI’s Instant Checkout. [11]
PayPal’s own Q3 earnings materials explicitly referenced building for an “agentic future” with partners including Google, OpenAI, and Perplexity, underlining that this is not a side project but a top-level strategic theme. [12]
The agentic-commerce effort isn’t limited to OpenAI. Reuters reported earlier in 2025 that PayPal partnered with Perplexity to enable instant checkout with PayPal or Venmo inside Perplexity’s interface, beginning in the U.S. [13]
Why markets care: investors are debating whether AI-integrated checkout becomes a new distribution channel for PayPal’s branded button (bull case) or whether AI shopping increases competitive pressure and compresses take rates (bear case)—a concern that appears explicitly in some analyst downgrades. [14]
C) PayPal’s BNPL strategy includes large-scale balance-sheet partnerships—KKR deal is a key example
In November, Reuters reported that KKR agreed to purchase up to €65 billion of PayPal’s European BNPL loans under an expanded, renewed arrangement (including a revolving commitment component). Under the structure described, PayPal continues underwriting/servicing while transferring much of the receivable exposure—an approach that can support BNPL growth without ballooning PayPal’s own balance sheet. [15]
Why markets care: BNPL is one of PayPal’s growth levers, but it also comes with credit-cycle sensitivity. Partnerships that shift receivables can reduce certain risks while raising questions about economics, funding costs, and how much of the value pool PayPal retains. [16]
D) PYUSD and crypto rails are back in the PayPal story—via YouTube payouts and AI-finance experiments
Another PayPal-linked development attracting attention is YouTube’s reported move to allow eligible U.S. creators to receive payouts in PayPal’s stablecoin, PYUSD, according to reporting cited by crypto and tech outlets. [17]
Separately, CoinDesk reported PayPal’s PYUSD being used in an AI infrastructure financing context via USD.AI, pointing to continued experimentation with programmable settlement use cases beyond retail checkout. [18]
Why markets care: stablecoin adoption is a double-edged driver—potentially opening new payment rails and float-related opportunities, while also adding regulatory and reputational sensitivity whenever crypto headlines turn volatile. [19]
4) Wall Street forecasts: price targets, downgrades, and what analysts are arguing about
A) December 2025 brought a cluster of downgrades and target cuts
PayPal has seen notable downward revisions in December, largely centered on the pace of improvement in branded checkout and the timing of a turnaround under CEO Alex Chriss.
Key examples widely circulated in market coverage include:
- Morgan Stanley: downgraded PayPal to Underweight and cut its price target to $51 (from $74), flagging concerns tied to checkout and longer-term growth dynamics. [20]
- BofA: downgraded to Neutral with a $68 target, arguing the branded-checkout reinvigoration is taking longer than expected and limiting near-term upside. [21]
- Baird: downgraded to Neutral with a $66 target, pointing to uneven volumes and a view that a near-term “clearing event” is less likely. [22]
- J.P. Morgan: downgraded to Neutral (from Overweight) and cut its target (reported at $70), saying the turnaround is taking longer to show up in results. [23]
- Mizuho: maintained Outperform but lowered its price target to $75 from $84, citing slower branded checkout growth. [24]
Individually, none of these notes decides PYPL’s direction. Together, they show the center of gravity on Wall Street has shifted from “re-rating soon” to “prove it in branded checkout first.” [25]
B) The consensus forecast range is wide—reflecting genuine disagreement
A Nasdaq.com analyst-forecast roundup (sourced from aggregated analyst data) put PayPal’s average one-year price target around $80.95 as of late December, with a low forecast in the low-$50s and a high forecast well above $100—an unusually wide spread for a mega-cap payments platform and a sign that the bull/bear debate is still unresolved. [26]
How to interpret that range before the open:
- Bears are essentially underwriting a future where branded checkout stays sluggish, competitive pressures worsen, and PayPal’s AI narrative is more overhang than catalyst. [27]
- Bulls are underwriting a future where PayPal’s scale + identity + merchant network becomes a default payments layer in AI-driven shopping, while cost discipline and capital returns (buybacks/dividend) support downside. [28]
5) Fundamentals snapshot: what PayPal last reported, and what it guided for next
PayPal’s most recent quarterly report (Q3 2025, released Oct. 28, 2025) showed:
- Net revenues:$8.417B, up 7% year over year
- Total payment volume (TPV):$458.1B, up 8% year over year
- Active accounts:438 million, up 1% year over year
- Non-GAAP EPS:$1.34, up 12% year over year
- Free cash flow:$1.7B (with an “adjusted” free cash flow figure also provided)
- Share repurchases:$1.5B in the quarter
These figures are from PayPal’s published Q3 earnings release PDF. [29]
In that same release, PayPal also initiated a quarterly dividend program, declaring a $0.14 per share cash dividend payable Dec. 10, 2025 to shareholders of record Nov. 19, 2025, and described this as a targeted payout ratio of 10% of non-GAAP net income. [30]
For guidance, PayPal projected:
- Q4 2025 non-GAAP EPS:$1.27 to $1.31
- FY 2025 non-GAAP EPS:$5.35 to $5.39
again, per the company’s Q3 earnings release. [31]
A critical nuance for the next session: multiple analyst notes in December referenced management commentary that branded checkout growth could slow in Q4, which is one reason Wall Street became more cautious into year-end. [32]
6) The pre-open checklist for PYPL on Dec. 26: what tends to move the stock next
Here are the practical “watch items” that matter most heading into the bell:
Near-term catalysts (days to weeks)
- More analyst actions: PYPL has been sensitive to rating changes and price-target resets in December. A single upgrade/downgrade can move the stock quickly in low-volume sessions. [33]
- Regulatory headlines on PayPal Bank: even without a decision, incremental reporting around the FDIC/Utah process can change sentiment. [34]
- AI-commerce product updates: any concrete rollout milestones for ChatGPT/PayPal checkout (or broader partner expansions) would be read as “proof points” beyond narrative. [35]
- Crypto/stablecoin headlines tied to PYUSD: creator payouts and PYUSD expansion stories can swing perception, especially if they connect to mainstream platforms like YouTube. [36]
Core debate drivers (months)
- Branded checkout momentum: this remains the metric at the heart of the downgrade cycle. Analysts want evidence PayPal can stabilize or grow share at checkout. [37]
- Economics of BNPL and funding: partnerships like the KKR arrangement are important, but investors will keep asking what margin and risk profile PayPal ultimately retains. [38]
- Capital returns vs. investment cycle: PayPal is now paying a dividend and buying back stock, but analysts also expect continued investment—especially if 2026 is an “investment year,” as some notes suggest. [39]
Bottom line before the Dec. 26 open
PayPal stock is entering the Dec. 26, 2025 session with three forces colliding:
- A heavy December downgrade tape focused on branded checkout and turnaround timing,
- A real strategic expansion (PayPal Bank applications) that could reshape parts of the business if approved, and
- A high-visibility AI-commerce push (OpenAI/Perplexity and broader agentic commerce positioning) that could be a growth lever—but still needs measurable traction to satisfy skeptics. [40]
In holiday-thin conditions, the biggest risk is overreacting to a single headline. The cleanest “north star” for PYPL remains whether PayPal can translate product initiatives (AI checkout, Venmo expansion, merchant tools, and banking ambition) into durable branded-checkout strength and improving economics—the same pressure point that drove multiple firms to reset targets in December. [41]
This article is for informational purposes only and is not investment advice.
References
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