Morgan Stanley Reduces Price Target on PayPal Holdings (PYPL)

PayPal Holdings, Inc. (NASDAQ:PYPL) is among the 7 Best Digital Payments Stocks to Invest In Now.

On December 18, 2025, theFly reported that Morgan Stanley reduced its price objective to $51 from $74 and lowered PayPal Holdings, Inc. (NASDAQ:PYPL) from Equal Weight to Underweight.

According to the firm, making upgrades to PayPal Holdings, Inc. (NASDAQ:PYPL)’s branded checkout integrations will be difficult and time-consuming. Morgan Stanley predicts slow dollar growth through 2028 due to a lack of Venmo revenue generation, share loss, and take rate decline. The agentic story will continue to be an overhang on the stock, per the firm. The downgrade came after Morgan Stanley decided to reduce the company’s profit and margin projections.

Separately, despite better-than-expected results, PayPal Holdings, Inc. (NASDAQ:PYPL) disclosed a revenue miss and weaker fourth-quarter guidance, which caused the company’s shares to drop as much as 7%. The firm reported adjusted EPS of $1.20 for the third quarter, exceeding forecasts of $1.07. The revenue was $7.85 billion, less than the projected $7.89 billion.

The business expects low single-digit revenue growth in the fourth quarter, compared to analyst projections of 5.4% to $8.46 billion.

PayPal Holdings, Inc. (NASDAQ:PYPL) offers electronic payment solutions to businesses as well as consumers, with a particular focus on online transactions.

While we acknowledge the potential of PYPL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 High-Growth EV Stocks to Invest In and 13 Best Car Stocks to Buy in 2025.

Disclosure. None