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PayPal Downgraded: Do Not Panic!

Summary

PayPal downgraded by analysts at Compass Point.

Management looks to improve efficiency and cost structure.

PayPal looks to invest in its mobile platform.

PayPal (NASDAQ:PYPL) has been a great business that has outperformed since its spin off from eBay (NASDAQ:EBAY) last year. PayPal management has made it clear that they will be cutting costs and improving its mobile platform, while striving for improving its earnings going forward. Now that PayPal has spun off, there are excellent opportunities present for management to drive efficiencies and improve margins, while investing in a superior mobile payment platform that looks to give its users the greatest user experience possible. While PayPal faces tough competition in Apple Pay (NASDAQ:AAPL) and Google Wallet (NASDAQ:GOOG) (NASDAQ:GOOGL), it appears that PayPal is planning to offer a solution that is different from its uprising competitors, as PayPal CFO John Rainey stated that "PayPal is truly different, we are the only company in the world that is 100% focused on digital payments. And perhaps more importantly, what is unique to us is that we are technology and device and operating system agnostic."

PayPal downgraded by analysts at Compass Point

PayPal stock was recently downgraded by analysts at Compass Point as they rated PayPal at neutral from its initial buy rating, while dropping the target price by a dollar from $41 to $40. Analysts stated that they were not impressed by PayPal's choice to buy money transfer company XOOM for $890 million in 2015. Compass Point also stated the "company's continued focus on acquisitions in a seller's market" implies that they're concerned that PayPal will continue paying premium prices for...


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