New York, May 12, 2026, 12:05 EDT
- PayPal hovered just above $45 near midday, steady despite an early drop, while large-cap tech ETFs slipped.
- Truist lowered its PayPal price target to $44, maintaining a Sell rating. The firm cited higher rewards spending and weaker international payment volumes.
- Bulls are pointing to cash flow, Venmo, and share repurchases. On the other side, bears focus on sluggish branded checkout and another quarter of margin strain.
PayPal Holdings didn’t crack on Tuesday, just couldn’t find a direction. The stock hovered around $45.16, posting a modest 0.2% gain after dipping to $44.36 earlier. QQQ dropped roughly 1.7%, with SPY sliding 0.8%.
That relative calm counts for something. Investors weren’t reacting to Truist’s cut as if it were a new blow; instead, they saw it as another data point in a turnaround narrative that took a hit after earnings. The chart’s message: some of the bad news is baked in, but buyers don’t have what they need yet to lift the stock past the mid-$40s.
Truist trimmed its price target to $44 from $45, sticking with a Sell rating. The firm cited sliding revenue estimates, pointing to higher spending on loyalty and rewards at PayPal, while international TPV stays sluggish. TPV—total payment volume—tracks the dollar amount handled on the platform. And that’s the snag: PayPal’s still posting growth, but maintaining that momentum isn’t coming cheap.
First-quarter results from PayPal handed ammunition to both bulls and bears. Total payment volume reached $463.96 billion, an 11% climb; revenue landed at $8.35 billion, rising 7%; transaction margin dollars—seen by investors as a clearer signal of payment profitability—came in at $3.81 billion, up 3%. That figure strips out payment-processing costs and transaction plus credit losses.
The headline numbers weren’t the issue—tone was. CEO Enrique Lores, on the call, called himself “realistic” about the need for “significant changes” at PayPal. Management pointed to at least $1.5 billion in gross run-rate savings targeted over two to three years. That doesn’t sound like a celebration. This is the language of a reset. Investing.com
Guidance gives a reason for the stock’s pause. PayPal is looking at a roughly 3% drop in transaction margin dollars for the second quarter, with adjusted earnings per share projected to slide about 9%. Adjusted EPS, or earnings per share, reflects profit after PayPal’s specific adjustments. Investors can handle a reset, but not when it drags down near-term profits.
Bulls aren’t out of reasons yet. PayPal projects adjusted free cash flow topping $6 billion for the year, and plans to match that with a $6 billion share buyback. Venmo volume climbed 14% in the first quarter. Shares sit at roughly 8.5 times earnings, so the market’s barely pricing in any upside on branded checkout.
The bear camp doesn’t hesitate: branded checkout, stripped of currency swings, managed just 2% growth. Management noted quarter-to-date trends are tracking at the bottom of PayPal’s full-year guidance. If it takes ongoing spending—rewards, marketing, tech—just to keep the PayPal button from slipping, “cheap” might just stick around. Investing.com
Payment stocks didn’t move in lockstep, putting PayPal’s slide in the spotlight. Visa picked up 1.1%, Mastercard tacked on 1.4%. Affirm slipped 0.6%, Shift4 fell 3.5%. Investors were picking through the sector, weighing network heft, lending risk, and execution chops—not just selling everything payments-related.
Macro backdrop stayed rough. April’s CPI print landed inflation at 3.8%, core at 2.8%—not exactly the numbers that bring the Fed closer to cuts. Polymarket odds for a “no change” in June: 98%. Over on Kalshi’s rates page, there’s a 96 quote for fed funds holding above 3.50% post-meeting. That’s an ongoing drag for PayPal; higher rates keep the screws on fintechs that count on spending to get growth moving again. Bureau of Labor Statistics
The muted reaction in the stock tells the story. PayPal isn’t getting punished anymore merely for cautious guidance after a beat—that played out last week. Still, investors aren’t putting a premium on the Lores turnaround yet, not with branded checkout stubbornly looking like the problem spot.
