PayPal Slips 3% Ahead of Earnings Despite Truist Target Raise; Klarna and Affirm Retreat

Selling in payments stocks is landing hardest on PayPal Holdings (NASDAQ:PYPL | PYPL Price Prediction) as the company’s third-quarter report draws near this week. PayPal stock is at $55.12, down 3% in afternoon trading. This decline reflects trader caution before results arrive. That drop stands out because a Wall Street firm just lifted its price target on PayPal stock.

Meanwhile, Klarna (NYSE:KLAR) stock is at $12.61, down 2%, a smaller loss than PayPal’s that still keeps the buy now, pay later lender in negative territory. Affirm Holdings (NASDAQ:AFRM) stock is at $69.52, down 0.8%, the smallest decline of the three payments names and well short of PayPal’s drop.

Broader financials are moving in the opposite direction. The Financial Select Sector SPDR ETF (NYSEARCA:XLF) is at $56.04, up 0.3%. For a market-wide read, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is at $765.41, up 0.7%.

Truist Lifts Its PayPal Target as Shares Slide

Truist raised its price target on PayPal stock to $58. The firm also kept a Hold rating as part of a preview of third-quarter results across payments and fintech stocks. That raise arrives while PayPal stock is heading lower, which sets the analyst’s view apart from the trading in the shares.

A Hold rating keeps Truist neutral on PayPal stock, so the higher target reads as a measured adjustment to the firm’s model, and the coming report is the next chance for PayPal’s results to support that adjustment or undermine it.

Selling Concentrates in the Biggest Payments Name

While the Financial Select Sector SPDR ETF and the SPDR S&P 500 ETF Trust rise, PayPal stock is falling, which marks the pressure as company-specific. Smaller declines in Klarna and Affirm stock show the selling sitting hardest on the largest payments name as its quarterly update approaches.

Venmo, branded checkout and merchant processing all sit inside PayPal’s broad digital payments platform. Klarna and Affirm, by comparison, focus on buy now, pay later lending at the point of sale, and their shares are posting smallest declines.

PayPal stock trades at a trailing P/E ratio of 10x, a low multiple that frames the debate over whether the company’s growth can pick up. Supporters can point to that cheap multiple as a cushion if results hold steady, but skeptics can argue the discount reflects slow growth that has yet to turn higher.

What PayPal’s Report Has to Show

Branded checkout is the core test for PayPal’s third-quarter report. Steady growth there could support the case that the company’s turnaround is gaining traction, while a slowdown could add weight to the doubts behind the selling. That business is central to the debate over PayPal’s recovery.

Venmo and merchant processing round out the picture, since both show whether PayPal can lean on growth beyond its own checkout button. Traders can watch for any change in the company’s full-year outlook alongside the quarterly numbers.

Truist’s higher target gives the bull case a reference point, while its Hold rating keeps that view measured. A PayPal quarter that holds up on branded checkout could draw fresh support for the shares, and a miss could leave the target raise looking early. Investors weighing their exposure should adjust their holdings carefully given PayPal stock’s slide ahead of the report.

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