PayPal's Stock Pulls Back From Record After Analyst Cuts Rating On Valuation Concerns

Shares of PayPal Holdings Inc. fell 1% in premarket trade Wednesday, pulling back from the previous session's record close, after the digital payments company was downgraded at SunTrust Robinson Humphrey, which cited concerns over valuation. The stock has rocketed 49% year to date through Tuesday, while rival Visa Inc.'s stock has climbed 25% and the S&P 500 has gained 9.9%. Analyst Andrew Jeffrey cut his rating to hold after being at buy since he started covering the stock two years ago. He kept his price target at $60, which is just 1.8% above Tuesday's closing price of $58.96. Jeffrey said he believes there are a number of short-term tailwinds for the stock, including potential pricing increases, more partnerships and increasing adoption of its Choice and OneTouch services. "We believe these are materially priced in, however," Jeffrey wrote in a note to clients. He said long-term competitive risks and uncertainties about the monetization of Venmo also balance the bullish outlook.