BofA upgraded PayPal stock to "buy"
PayPal Holdings Inc (NASDAQ:PYPL) is notably higher in electronic trading, last seen up 3% to trade at $94.59 after Bank of America (BofA) upgraded the shares to "buy" from "neutral" and hiked its price target by $20 to $114. The firm believes that activist Elliot Management is poised to push for new initiatives that will pump up PayPal's future earnings. BofA's bullish attitude is nothing new, as Daiwa upgraded PYPL earlier this month after noting several positive catalysts.
On the charts, PayPal stock has struggled to overcome the $100 level and is a far cry from July 2021 all-time highs at $309.57. Despite the 51% year-to-date deficit, there's support emerging from PYPL's now upward-sloping 40-day moving average.
Options traders have been betting more bearishly lately. This is per the security's 10-day put/call volume ratio of 0.96 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that ranks in the highest percentile of its annual range. In other words, bearish bets are at their most popular compared to the last 12 months.
Whatever the direction, options are a preferred route. The equity's Schaeffer's Volatility Scorecard (SVS) sits at a 90 out of 100, meaning PYPL has exceeded option traders' volatility expectations during the past year.