Goldman Sachs analyst Will Nance downgraded PayPal Holdings, Inc. (NASDAQ:PYPL) and Marqeta, Inc. (NASDAQ:MQ), citing downside risks to their 2026 forecasts.
The analyst notes that investor sentiment has become increasingly cautious as the fourth quarter approaches.
• PYPL shares are under pressure. Get the details here.
The analyst cited key concerns scuh as tougher year-end comparisons following last year's spending surge, renewed pressure on lower-income consumers and continued rotation from cyclical sectors toward the large-cap tech sector.
Nance says that the third-quarter fundamentals appear stable, reflecting steady spending trends. The analyst expects investors to focus on potential 2026 estimate cuts.
PayPal: Nance downgraded PayPal to Sell from Neutral with a price forecast of $70.
The analyst says that management commentary indicates that branded checkout growth is unlikely to pick up soon, especially against tough year-over-year comparisons in the fourth quarter.
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Nance writes that without a rebound in its core business, the lapping of 2026 tailwinds, such as Braintree repricing and stronger credit activity, combined with continued rate pressure, could drive total margin growth below consensus.
The analyst also sees limited visibility for a near-term rebound in branded checkout, given weaker performance in Germany, tariff and de minimis-related disruptions in the U.S., and intensifying competition.
This marks a shift from earlier optimism about stronger branded growth by year-end, notes the analyst.
Nance forecasts roughly 3% total margin growth in 2026, below the ~5% consensus, and expects valuation pressure to persist amid ongoing competitive challenges in online commerce.
Marqueta: The analyst downgraded the company to Sell from Neutral.
Nance says that renewed concern over its heavy reliance on Block is emerging after Block added a new issuer processing partner, which could result in a 2% reduction in gross profit next year.
The change poses a long-term headwind as Block accounts for roughly half of Marqeta's volume and revenue, notes the analyst.
The analyst adds that the move also underscores broader TAM pressures as fintechs internalize processing, Stripe expands card programs, and banks remain slow to modernize.
Nance’s 2026 gross profit estimate is ~2% below consensus for the company.
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