Why This Big Time Investor Disagrees With Jeffries' PayPal Downgrade

PayPal Holdings Inc PYPL was featured Wednesday on CNBC's "The Exchange" following a bearish analyst call from Jefferies.

What Happened: Jefferies analyst Trevor Williams downgraded PayPal from a Buy rating to a Hold and lowered the price target from $255 to $200.

Williams sees e-commerce trends worsening, decreasing transaction sizes and growing competition for PayPal. 

The Jefferies analyst noted that there isn't anything wrong with the company, however, he thinks the stock's multiple is unlikely to expand. 

Related Link: Where PayPal Holdings Stands With Analysts

Grisante's Take: MAI Capital Management's Chris Grisante described Williams' note as "perfectly reasonable" however he highlighted a few areas of disagreement. 

The analyst makes the point that "e-commerce market share is not going to be as strong as we think, and I strongly disagree with that," Grisante said.

Over the longer-term, Grisante expects e-commerce to continue to take share from brick-and-mortar businesses. 

He also addressed the Jefferies analyst's mention of decreasing transaction sizes, "I think that's already in the numbers and certainly in a stock that's down 40%." 

Grisante told CNBC that he likes the stock at current levels and is especially excited about the prospects of PayPal's Venmo. 

"They will find a way to monetize Venmo and just about everybody and their uncle uses Venmo," he noted.

PYPL Price Action: PayPal has traded as low as $177.40 and as high as $310.16 over a 52-week period.

From Last Week: PayPal, Salesforce Among Jon Najarian's Top Picks For 2022

The stock was down 2.06% at $187.60 at time of publication.

Photo: courtesy of PayPal.