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Baird analyst Colin Sebastian downgraded PayPal (Nasdaq: PYPL) stock to neutral with a $66 price target this morning.
“We were already below consensus for 2026 and 2027 EPS,” notes Sebastian, and now “we think that a combination of uneven transaction volumes thus far in Q4, along with another investment cycle on tap in 2026, and uncertain timing around broader platform improvements mean that a ‘clearing event’ is less likely near term.”
It’s not entirely clear what he means by that, but in the context of a downgrade, it certainly doesn’t sound like good news! Most likely, Sebastian is looking for clear signs that PayPal’s business is on the upswing — and he doesn’t expect to see any.
“We remain constructive longer term given opportunities to improve branded checkout, accelerate Venmo monetization,” admits the analyst. Still, until PayPal shows it’s gaining market share and showing better revenue growth, it seems this analyst won’t be recommending anyone buy PayPal stock.
PayPal stock is down 0.6% on the report. The Vanguard S&P 500 ETF is down 1.5% today.
Camping- and fishing-goods supplier Johnson Outdoors (Nasdaq: JOUT) missed earnings by a massive $2.15 this morning, reporting a fiscal Q4 2025 loss of $2.83 per share. This was despite beating revenue estimates with sales of $135.8 million.
Losses did improve year over year (meaning Johnson Outdoors lost a bit less money), but didn’t improve as much as Wall Street wanted. Shares of the stock aren’t down too much considering the size of the miss, though, only about 3%.
Warehouse store operator Costco (Nasdaq: COST) beat by 22 cents last night, reporting fiscal Q1 2026 earnings of $4.50 per share. Sales likewise exceeded expectations at $67.3 billion.
Same store sales at Costco grew a solid 6.4% year over year. At the same time, Costco is growing sales through new store openings. Costco plans to open about 30 new stores annually going forward (net of old store closings) — not that the company necessarily needs more physical locations. E-commerce sales through Costco’s website, says the company, grew 24% in the quarter.
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The Vanguard S&P 500 ETF (NYSEMKT: VOO) ended up gaining a modest 0.25% on Thursday, one day after the Federal Reserve cut interest rates by the expected… 0.25%. Just a coincidence, I’m sure. And it’s a coincidence, too, that with zero interest rate cuts remaining in 2025, the Voo is exactly flat premarket today.
That doesn’t mean there’s no news to report, however.
The biggest news today, for a certain class of investors at least, is that The Washington Post is reporting President Trump plans to reclassify marijuana as a Schedule III drug, significantly easing restrictions on the drug’s possession and use. From an investing perspective, this will permit banks to service marijuana companies and states to regulate the drug. Trump could issue his order as soon as next month, reports CNBC, and new federal regulations could issue from the Drug Enforcement Agency as early as this coming summer.
Shares of leading cannabis stocks such as Aurora Cannabis (Nasdaq: ACB), Canopy Growth (Nasdaq: CGC), and Tilray (Nasdaq: TLRY) are soaring on the news, up 20%, 25%, and 38% premarket.
Meanwhile in tech, Nvidia (Nasdaq: NVDA | NVDA Price Prediction) may increase production of its H200 artificial intelligence chip, its second-fastest AI chip, purpose-built for sale in China and subject to a 25% export tariff by the U.S. President Trump said Tuesday the U.S. will permit Nvidia to export H200 chips to China.
Nvidia investors like the move, and Nvidia stock is up 0.5% premarket.
In other tech news, Broadcom (Nasdaq: AVGO) beat earnings by eight cents last night. The chipmaker reported fiscal Q4 2025 earnings of $1.95 per share, and beat revenue estimates by $500 million with $18 billion in quarterly sales.
Broadcom also guided higher for fiscal Q1 2026, saying revenue should be $19.1 billion, also ahead of estimates — but apparently not ahead enough. Broadcom shares are down 5% premarket.
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Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
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