Shares of PayPal Holdings Inc. PYPL, -1.64% are down 1.6% in Wednesday trading after analysts at Bernstein initiated coverage of the stock with a market perform rating and warned of "underappreciated business pressures surfacing for the leading online checkout button." While they like the company's heavy exposure to the fast growing e-commerce landscape and the potential for PayPal to make an acquisition that helps the business, they worry about other factors, including "margin dilutive incremental growth, intensifying competition and eBay dependency (still not fully priced in)." The analysts prefer Visa Inc. V, -0.35% and Mastercard Inc. MA, -1.26% initiating both with outperform ratings due to their status as the "crown jewels of the secularly growing payments market." PayPal shares are up 74% over the past 12 months, while the S&P 500 SPX, -0.29% is up 10%.
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