The payments processor PayPal cut its annual revenue forecast and warned of a dismal holiday quarter as consumers cut back on discretionary spending, causing shares of the company to fall 7% in premarket trading.
Consumers' purchasing power has been impacted by decades-high inflation while also being threatened by an impending recession.
According to PayPal, lower- and middle-income households have begun to reduce discretionary spending as a result of rising food, energy, and gas prices.
"Given a challenging macro environment, slowing e-commerce trends and an unpredictable holiday shopping season, we are being appropriately prudent in our Q4 revenue guide," Chief Executive Daniel Schulman said in a call with analysts.
The San Jose, California-based company reduced its expected adjusted revenue growth from 11% to 10%.
The business also predicted that holiday-quarter e-commerce spending would grow in the low single digits, in line with predictions made by a number of businesses, including Mastercard, which last month provided gloomy fourth-quarter revenue forecasts.
"E-commerce remains in precarious territory with trends deteriorating through the quarter and an uncertain backdrop, increasing the possibility that not much improvement may materialize next year," KBW analysts wrote in a note and slashed the price target on the stock to $95 from $115.
Following the results, at least four additional brokerages, including J.P. Morgan and Jefferies, lowered their price targets.
(Source:www.usnews.com)
Consumers' purchasing power has been impacted by decades-high inflation while also being threatened by an impending recession.
According to PayPal, lower- and middle-income households have begun to reduce discretionary spending as a result of rising food, energy, and gas prices.
"Given a challenging macro environment, slowing e-commerce trends and an unpredictable holiday shopping season, we are being appropriately prudent in our Q4 revenue guide," Chief Executive Daniel Schulman said in a call with analysts.
The San Jose, California-based company reduced its expected adjusted revenue growth from 11% to 10%.
The business also predicted that holiday-quarter e-commerce spending would grow in the low single digits, in line with predictions made by a number of businesses, including Mastercard, which last month provided gloomy fourth-quarter revenue forecasts.
"E-commerce remains in precarious territory with trends deteriorating through the quarter and an uncertain backdrop, increasing the possibility that not much improvement may materialize next year," KBW analysts wrote in a note and slashed the price target on the stock to $95 from $115.
Following the results, at least four additional brokerages, including J.P. Morgan and Jefferies, lowered their price targets.
(Source:www.usnews.com)
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