PayPal upgraded to Neutral from Sell by Seaport Research.

PayPal has been upgraded to Neutral from Sell by Seaport Research. The firm believes potential tariff impacts to the company's business are better than feared and has increased estimates. Seaport also notes that PayPal's growth trajectory is improving.

Seaport Research has upgraded PayPal (PYPL) to a Neutral rating from a previous Sell recommendation. The firm cited improved outlooks for the company's business performance and reduced concerns about potential tariff impacts. Seaport Research has increased its performance estimates, reflecting a more positive view of PayPal's growth trajectory [1].

The upgrade comes amidst a volatile market environment influenced by broader economic factors. On July 14, 2025, the S&P 500 experienced a 0.3% decline, triggered by President Trump's announcement of a 35% tariff on Canadian imports. This announcement affected market sentiment, leading to declines in the Nasdaq and Dow Jones [2].

PayPal's shares fell by 5.7% following the announcement, influenced by reports that JPMorgan would start charging fintech companies for access to client data. Despite this, the stock's current price of $71.36 reflects a decrease of 5.73% or $4.34, with a trading range between $70.80 and $75.13 for the day. The market capitalization of PayPal stands at approximately $69.4 billion, with a trading volume of 21,877,721 shares on the NASDAQ exchange [2].

Seaport Research's upgrade is in line with the average target price of $81.16 set by 36 analysts, which implies an upside of 13.73% from the current price. The consensus brokerage recommendation is currently "Outperform," indicating a positive outlook from 45 brokerage firms [3].

The upgrade also follows PayPal's strong earnings report for the first quarter of 2025. The company reported an 8% growth in transaction margin, a 23% increase in non-GAAP earnings per share, and a 20% revenue growth for Venmo. Additionally, PayPal expanded its offerings with innovations like a dynamic smart wallet and agentic commerce, positioning itself as a strategic commerce partner for merchants [3].

However, PayPal faces challenges such as declining transaction take rate and slowing PSP volume growth. The company is maintaining its full-year guidance due to macroeconomic uncertainties and potential impacts from geopolitical factors [3].

Institutional investors and hedge funds have also shown increased interest in PayPal. New York State Common Retirement Fund raised its holdings by 4.5% in the first quarter, while other institutional investors like Norges Bank and Capital Research Global Investors also boosted their positions [4].

Insiders at PayPal have been active in the market as well. Suzan Kereere sold 4,162 shares, and EVP Diego Scotti sold 3,839 shares in transactions dated June 6, 2025. The insiders' combined position decreased by 7.91% and 18.43%, respectively [4].

In conclusion, Seaport Research's upgrade to Neutral reflects a more balanced outlook on PayPal's performance. The company's strong earnings and innovations have offset concerns about tariffs and other macroeconomic factors. However, investors should continue to monitor the company's performance and the broader market environment.

References:
[1] https://www.tipranks.com/news/the-fly/paypal-upgraded-to-neutral-from-sell-at-seaport-research-thefly
[2] https://site.financialmodelingprep.com/market-news/paypal-holdings-stock-upgrade-seaport-global-market-volatility
[3] https://www.gurufocus.com/news/2973849/seaport-research-upgrades-paypal-pypl-to-neutral-citing-improved-outlook-pypl-stock-news?mobile=true
[4] https://www.marketbeat.com/instant-alerts/filing-new-york-state-common-retirement-fund-has-9014-million-stake-in-paypal-holdings-inc-nasdaqpypl-2025-07-14/