Bank of America Securities resumed coverage of PayPal Holdings Inc. (NASDAQ: PYPL) with an Underperform rating and a $53.00 price target. Analyst Matt O’Neill said PayPal’s strategy of underpricing Braintree to encourage adoption of its branded PayPal button may be unwinding as the company manages its business segments more independently.
BofA Securities said the shift could weigh on adoption of PayPal’s branded services. It also warned that large merchants may resist even modest price increases in unbranded processing and move volume to lower-cost competitors.
The firm does not expect value-added services to become a significant growth driver until around 2027. O’Neill sees few near-term factors that could offset these challenges.