Shares of PayPal (PYPL) are under pressure on Tuesday after the company reported mixed third-quarter results and gave a weaker than expected outlook for the fourth quarter. As PayPal shifts away from eBay (EBAY), the company announced a new partnership with Amazon (AMZN) to let U.S. customers pay with Venmo at checkout, starting in 2022. Following the earnings release, several Wall Street analysts lowered their price targets on the stock but remained mostly bullish on the name.

RESULTS: PayPal reported third-quarter non-GAAP earnings per share of $1.11 and revenue of $6.18B, with consensus at $1.07 and $6.23B, respectively. The company also reported total payment volume, or TPV, of $310B, growing 26%, and 24% on an FX-neutral basis. For the fourth quarter, PayPal sees non-GAAP earnings per share of $1.12 and revenue of $6.85B-$6.95B, both below consensus of $1.27 and $7.24B, respectively. Additionally, the company said it sees full-year 2021 non-GAAP earnings per share of $4.60, with consensus at $4.73, and revenue of $25.3B-$25.4B, with consensus at $25.77B. PayPal expects to add about 55 million net new active accounts, or NNAs, including about 3 million active accounts from the acquisition of Paidy in fiscal year 2021, and expects TPV growth to be in the range of about 33%-34% at current spot rates and about 31%-32% on an FXN basis. For 2022, the company sees revenue up 18%.

Alongside earnings, PayPal announced that it is teaming up with Amazon to enable customers in the U.S. to pay with Venmo at checkout. "Starting next year, customers will be able to make purchases on Amazon.com and the Amazon mobile shopping app using their Venmo accounts," the company stated.

TARGET CUTS AFTER RESULTS: Citi analyst Ashwin Shirvaikar lowered the firm's price target on PayPal to $300 from $350, while keeping a Buy rating on the shares. "This wasn't a good quarter for PayPal" as it missed third-quarter revenue and guided down fourth quarter, Shirvaikar told investors in a research note. However, the analyst pointed out that merchant service growth "is healthy," with total payment volume growth of 27%-30% expected in the fourth quarter. Shirvaikar looks for near-term weakness and a "1-2 quarter recovery" before investors focus more on the second half of 2022, which should help the stock.

RBC Capital analyst Daniel Perlin also cut the firm's price target on PayPal to $298 from $322, maintaining an Outperform rating on the shares. The company's third quarter results and guidance suggest that the supply chain constraints are likely to be an issue this holiday season as consumers wanting the certainty of goods and delivery flock back into stores versus online, the analyst contended. Perlin added, however, that PayPal's Venmo partnership with Amazon helps the narrative for the stock.

Following quarterly results, KeyBanc analyst Josh Beck lowered his price target on PayPal to $325 from $335 and kept an Overweight rating on the shares. A confluence of factors including Pinterest (PINS) acquisition chatter, macro, and eBay are likely to continue to weight on sentiment in the near-term, Beck contended. However, the analyst would be a buyer on the pullback as he sees it as a preferred mega-cap play provided encouraging progress on "buy now, pay later," FinApp redesign, partnerships and accretive pricing actions.

Meanwhile, Oppenheimer analyst Dominick Gabriele also lowered the firm's price target on PayPal to $268 from $329, keeping an Outperform rating on the shares. The analyst noted PayPal "significantly" reduced 2022 earnings per share expectations, off their 5 year-trend. Gabriele expects significant EPS-estimate reductions across consensus given management's near-term cautious stance on underlying industry/company-specific impacts. Given eBay's pressure on revenue growth, combined with further investments in the platform/reserve build grow-over, the analyst thinks PayPal's 2022/2023 adjusted operating margin could be under pressure versus 2021.

Baird, Deutsche Bank, Susquehanna, Credit Suisse, JPMorgan, DA Davidson, Wedbush, Evercore ISI, and Truist also lowered their price targets on PayPal's shares.

PRICE ACTION: In Tuesday morning trading, shares of PayPal have dropped over 12% to $201.54.