In a research report published today, Axiom analyst Victor Anthony initiated coverage on shares Paypal Holdings Inc (NASDAQ:PYPL) with a Hold rating and price target of $36, which represents a potential upside of 8% from where the stock is currently trading.
Anthony explained his neutral thesis noting, “PayPal’s positives, which include a large addressable market, a large user base with increasing wallet share and usage frequency, healthy growth financials, and a strong balance sheet, are balanced by what we see as rising competition on all fronts and a balanced risk-reward profile. The rising competition is coming from very large technology companies with meaningful resources to invest in the space and from smaller, more nimble payments companies. Our $36 price target is based on a 20x multiple to our 2017 EPS estimate of $1.79, a reasonable multiple given that we expect earnings to grow 18%, and one that is inline with the current trading multiple. Our bull case model points to a share price of $42.57 or upside of 26%, versus our bear case model which points to a share price of $26.42 or downside of 22%, both for year-end 2016.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Victor Anthony has a total average return of 13.7% and a 60.0% success rate. Anthony is ranked #129 out of 3765 analysts.
Out of the 26 analysts polled by TipRanks, 18 rate Paypal Holdings Inc stock a Buy, 5 rate the stock a Hold and 3 recommend Sell. With a return potential of 27%, the stock’s consensus target price stands at $42.46.