PayPal on 30-Day Downside Watch at Citi Ahead of Upcoming Results

Summary

  • Analysts at Citi have put PayPal (NASDAQ:) under a 30-day negative catalyst watch as they believe that the financial company may face a few stumbling blocks.
  • The company’s upcoming results are anticipated to act as the catalyst.
  • The primary factor is Citi’s expectation that PayPal may take more time to return to its gross profit transaction dollar growth.
  • Exiting less profitable contracts could be a potential solution for PayPal, which could lead to weaker TPV growth – an action that could be perceived negatively by investors.
  • Citi also suggests that the new management might not provide a full year’s outlook due to uncertainties and the early stage of their tenure. This might be seen as a negative surprise by investors.

PayPal on a Downside Catalyst Watch

Citi analysts put PayPal (NASDAQ:) under a 30-day downside catalyst watch in a brief note on Wednesday.

Upcoming Results as Potential Catalyst

The investment bank identified the financial corporation’s imminent results as a potential challenge, based on two specific elements.

Prolonged Gross Profit Transaction Process

Citi maintains the stance that the process of PayPal returning to gross profit transaction dollar growth might be lengthier than previously anticipated.

The bank suggested that one of the possible remedies could be terminating less profitable deals, which would lead to weaker TPV growth – a step that analysts predict could be misunderstood negatively by investors.

Uncertainty with New Management

Citi also expressed concerns that PayPal’s new management might choose not to present a complete annual forecast considering the current uncertainty and the infancy of their tenure.

Experts believe that this could be perceived as a negative surprise by investors.

The downside catalyst watch imposed on PayPal and the ensuing performance could influence investor strategy in forex or trading, particularly those dealing with assets linked to PayPal’s performance.

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