In a research report issued Friday, Canaccord analyst Michael Graham initiated coverage on shares of Paypal Holdings Inc (NASDAQ:PYPL) with a Buy rating and a $43 price target, which implies an upside of 27% from current levels.

Graham wrote, “We expect PayPal to continue its steady growth trajectory, benefiting from the long-term shift to cashless payments and continued eCommerce growth. Despite an increasingly complicated online landscape, we think Braintree, One Touch, and Venmo all should enhance the company’s growth and contribute to upside potential for estimates. We find the company’s position in offline payments less compelling, with risks related to trying to take share from well-entrenched incumbents. However, we are comforted by our perception that the stock is discounting very little offline success. We feel the valuation nearly reflects the growth profile in our base case. However, we see a tangible upside scenario that could lead estimates and the stock higher.”

“Our price target is based on 25x our 2017 non-GAAP EPS estimate of $1.72. We believe this is a fairly rich multiple relative to PayPal’s growth prospects. However, the increased earnings power implied in our upside scenario makes us more comfortable with the valuation,” the analyst added.

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Graham has a total average return of 10.2% and a 55.6% success rate. Graham is ranked #230 out of 3764 analysts.

Out of the 28 analysts polled by TipRanks, 19 rate Paypal Holdings Inc stock a Buy, 6 rate the stock a Hold and 3 recommend Sell. With a return potential of 24.2%, the stock’s consensus target price stands at $42.13.

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