Overview
RBC Capital notably lowered its one-year price target on PayPal (NASDAQ:PYPL) to $59.00 from $91.00 but kept an Outperform rating on the payments company. The move follows a steep selloff in the shares - the stock fell 22.89% over the past week and was trading at $40.44, under half of its 52-week high of $82.69.
Analyst rationale and leadership change
RBC Capital analyst Daniel Perlin attributed the adjustment to what he called an "abrupt CEO change," and signaled that management turnover highlighted concerns about execution speed. Perlin wrote that "the pace of change necessary to turn around Branded Checkout’s TPV growth was moving too slowly." The firm indicated that PayPal’s strategic direction remains intact, but said the new chief executive appears to be prioritizing "speed of execution, necessary investments, and narrowed focus on PayPal’s more strategic customers."
Financial signaling and guidance revisions
Company actions tied to the leadership shift included a material reduction in fiscal year 2026 guidance and the withdrawal of fiscal year 2027 projections that had been issued at the most recent Investor Day. Those moves have been central to the recent wave of analyst reassessments.
Fundamental health
Despite the operational and guidance setbacks, available financial-score data shows PayPal retains a perfect Piotroski Score of 9, indicating the company’s accounting and financial-statement fundamentals remain healthy by that metric.
Market reaction and near-term outlook
RBC cautioned that, even with an Outperform rating, PayPal shares are likely to "trade sideways (at best) in the near term as transitions take time," and it flagged fiscal year 2026 as "yet again, a transition year." That characterization reflects the firm’s view that organizational change and execution cadence will temper stock momentum in the short run.
Brokerage moves following the earnings and guidance developments
A number of brokerages have altered their recommendations and price targets in response to the slowdown in branded checkout and the company’s revised outlook:
- PayPal reported branded checkout growth of 1% year-over-year for the fourth quarter of 2025, a deceleration that prompted several downgrades.
- HSBC downgraded its rating from Buy to Hold and set a new price target of $47.00.
- Canaccord Genuity lowered its rating to Hold and cut its price target to $42.00, while noting PayPal's strong cash flow and valuation.
- Citizens moved the stock to Market Perform, citing the slowdown in checkout growth and an anticipated decline in transaction margin dollars for 2026.
- Compass Point upgraded PayPal to Neutral from Sell and adjusted its price target to $51.00, stating the CEO transition appears to have been baked into the stock price.
- Wells Fargo kept an Equal Weight rating but trimmed its price target to $48.00, pointing to execution-related challenges after the earnings miss and reduced guidance.
Implications
The cluster of downgrades and target cuts underscores a cautious repositioning by sell-side firms in response to both the management change and a measurable slowdown in one of PayPal’s growth engines. At the same time, balance-sheet strength indicated by a high Piotroski Score provides a counterweight that some analysts cited when calibrating their views.
Conclusion
RBC's reduction of its price target to $59 and continued Outperform stance, alongside a range of analyst rating changes, leaves PayPal in a period of heightened uncertainty. The company's trimmed 2026 outlook and withdrawn 2027 projections mean the near-term narrative will likely center on the pace of execution under new leadership and whether branded checkout growth can reaccelerate.