PayPal (PYPL.US) has been downgraded three times within the month, and Morgan Stanley has also joined the bearish camp.

This month, PayPal (PYPL.US) has faced analyst downgrades for the third time. On Tuesday, Morgan Stanley downgraded the rating of this payment giant from "neutral" to "underweight". Analyst James Faucette pointed out in a research report that his concerns mainly stem from the slow progress of the integration of PayPal's brand payment functionality, and that it is "more complex and time-consuming than expected, and has not yet effectively driven usage growth as expected". Bank of America Corp Securities also downgraded its rating due to the slow recovery of PayPal's brand payment growth, and agreed with Faucette's assessment. In addition, JPMorgan Chase downgraded PayPal's rating earlier this month. Faucette also mentioned that other challenges facing PayPal by 2026 include: slow progress in profitability of the young user group Venmo, and the potential evolution of "smart commerce" into a significant narrative risk factor for the company. The report concluded: "Given the slowdown in growth, and our expectation that PayPal will need to continue to invest funds to address these challenges and slow the loss of market share through marketing, the downward risk to its adjusted earnings per share is increasing." PayPal's Chief Financial and Operating Officer Jamie Miller recently stated at an event hosted by UBS Group AG that the company's initiatives to adjust operating expense management to support growth have "always been highly disciplined, and it continues to maintain strong free cash flow performance". As of Thursday's closing, PayPal's stock price fell by 1.23%.