PayPal Stock on the Rise After Billion-Dollar Deal in Japan

Sentiment surrounding PayPal has been overwhelmingly bullish

Deputy Editor
Sep 8, 2021 at 9:59 AM
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The shares of PayPal Holdings Inc (NASDAQ:PYPL) are up 1.8% at $298.40 this morning, following news that the company will acquire Paidy -- a Japanese buy now pay later (BNPL) company -- in a $2.7 billion mostly cash deal. Last year, the company acquired two smaller Australian BNPL firms, Sezzle and Zip Co. PayPal's top competitor Square (SQ) just made a similar overseas move, too, in which it acquired Australia's BNPL business Afterpay in a deal worth $29 billion. 

PayPal stock has been a steady performer this year, rising 25.2% in 2021, and up 52% in the last 12 months. Though a late-July bear gap distanced the shares from their July 23 peak of $309.47, PYPL staged a bounce of its 140-day moving average and $270 level, and is well on its way to closing said bear gap. 

Sentiment surrounding PYPL has been quite optimistic. Of the 26 in coverage, 25 call the stock a "buy" or better. Plus, the 12-month consensus price target of $327.67 is a 9.8% premium to last night's close. 

Echoing this bullishness, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), PYPL sports a 10-day call/put volume ratio of 5.44, which stands in the top percentile of its annual range. This means long calls haven't been more popular during the past year. 

 

 

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