PayPal Stock Edges Higher After Analyst Upgrade

Year-to-date, PayPal stock is still down more than 46%

Deputy Editor
Aug 16, 2022 at 9:17 AM
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PayPal Holdings Inc (NASDAQ:PYPL) is up 1.1% to trade at $102.60 before the opening bell, after Daiwa upgraded the shares to "outperform" from "neutral" and hiked its price target to $116. The firm noted several positive catalysts for the fintech staple, including cost reductions, stock buyback plans, a new CEO, and its upcoming Investor Day event.

In addition, J.P. Morgan Securities today revised its price target to $137 from $120, and a further unwinding of pessimism from analysts could continue to put wind at PYPL's back. While 21 brokerages consider the equity a "buy" or better, eight still recommend a tepid "hold" rating. What's more, the 12-month consensus price target of $120.98 is a 17.8% premium to last night's close.

PayPal stock could also benefit from a shift in the options pits, where puts rule the roost. This is per the security's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that ranks in the 94th percentile of its annual range. 

Those options traders are in luck, as PYPL sports relatively cheap options at the moment according to its Schaeffer's Volatility Index (SVI) of 42% that stands in the relatively low 30th percentile of readings from the past year. Even better, the security's Schaeffer's Volatility Scorecard (SVS) sits at a 91 out of 100, meaning PYPL has exceeded option traders' volatility expectations during the past year.

On the charts, PayPal stock recently broke above consolidation at the $90 level, an area the equity had struggled with since May. The 120-day moving average has also moved in as a level of support, after pressuring the shares for the last 10 months. Still, despite a 45.4% quarterly gain, the shares remain more than 46% lower year-to-date. 




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