Seaport Upgrades PayPal to Neutral, Shares Rise 3%
Summary
Seaport Global Securities upgraded PayPal (PYPL) from Sell to Neutral, citing reduced global tariff risks and operational improvements like Venmo's expanded utility and the introduction of PYUSD. This positive reassessment led to a 3% rise in PayPal's shares. Seaport now views PayPal's valuation as fair and has raised its 2025 and 2026 earnings forecasts, indicating a more optimistic outlook for the digital payments company.
Seaport Global Upgrades PayPal to Neutral Amid Easing Tariff Concerns and Operational Gains
San Jose, CA – July 14, 2025 – Seaport Global Securities has upgraded its rating on PayPal Holdings, Inc. (NASDAQ: PYPL) from "Sell" to "Neutral," a move that saw the digital payments giant's shares climb over 3% in intraday trading today. The upgrade reflects improved clarity surrounding global tariff risks and the positive strides PayPal has made in fortifying its long-term growth trajectory.
Seaport's previous bearish stance on PayPal was primarily driven by concerns that escalating global tariffs would dampen consumer spending, thereby hindering the company's ability to achieve its ambitious 8%–10% Checkout growth targets. However, a reassessment of the macroeconomic landscape indicates that trade-related risks are now less severe than previously anticipated. This shift has led Seaport to conclude that a material drag on PayPal's transaction volumes due to tariffs is no longer expected.
Beyond the favorable macro-economic adjustments, Seaport's revised outlook also acknowledges significant operational enhancements within PayPal's extensive ecosystem. The firm specifically highlighted two key initiatives contributing to this improved perspective:
- Expansion of Venmo's Utility: PayPal's continued efforts to broaden Venmo's functionality and integrate it more deeply into daily consumer transactions are seen as a vital incremental growth driver. This expansion is expected to enhance user engagement and transaction frequency.
- Foray into Stablecoins with PYUSD: The company's strategic entry into the stablecoin market with PYUSD is viewed as a forward-looking move designed to diversify revenue streams and tap into emerging digital asset trends. This initiative positions PayPal to potentially capture new market segments and reinforce its leadership in digital payments.
These factors collectively underpin Seaport's increased confidence in PayPal's future performance. Consequently, the firm has raised its earnings forecasts for both 2025 and 2026. Seaport now considers PayPal's current valuation fair, with the stock trading at approximately 14 times its projected earnings per share (EPS) for 2025 and 13 times its projected EPS for 2026. This valuation, combined with the reduced macro headwinds and operational improvements, supports the transition to a "Neutral" rating.
The upgrade signals a more optimistic outlook from Seaport Global Securities regarding PayPal's ability to navigate market challenges and capitalize on its strategic initiatives, potentially paving the way for sustained growth in the digital payments sector.