Paypal Holdings Inc (NASDAQ:PYPL) shares are upgraded from Hold to a Buy rating by analyst Kessler from S&P Capital IQ. The analyst boosted his one-year price target by $1 to $47. This implied that the stock offers over 15 percent upside potentials from the current levels.
The price target is based on peer having a median forward PE of 24.7X and a PE to growth of 1.5. With the help of those multiples and enabling premiums, the analyst sees Paypal Holdings unique competitive position, as well as, takeover appeal. As a result, he has averaged the outputs result in his targeted price.
Paypal Holdings reported adjusted earnings of 42 cents a share, which is in line with Capital IQ estimate. Revenue, which grew 17 percent, was fueled by gains of 23 percent in payment transactions, as well as, 22 percent in total payment volume.
“We slightly adjust our EPS estimates, down $0.01 to $1.73 for ’17 and up $0.01 to $2.03 for ’18,” the analyst wrote in his research note to clients.
The stock traded down 3.13 percent at last check.