This Top Analyst Just Upgraded PayPal To Buy

• Paypal Holdings Inc PYPL shares are down 10 percent since July 7 and have remained below the $35 mark since August 20.
• Stifel’s Scott W. Devitt has upgraded the company from Hold to Buy, with a price target of $40.
• Devitt believes that One Touch has the potential to drive upside and that the recent selloff in the stock offers an attractive buying opportunity.

According to Devitt, the One Touch feature could drive upside to the company’s TPV growth estimate for 2016, “based on the incremental conversion and average order value increases it brings to merchants.”

Devitt believes this feature is a “critical product innovation,” since it addresses issues such as merchant integration, shopping cart abandonment, security concerns and user adoption.

One Touch is still in the early stages of a global rollout, accounting for only 5 percent of U.S. transaction at present. However, even if it achieves 50 percent penetration in the US by the end of 2015, it could drive upside to the company’s numbers.

“We believe current levels present a buying opportunity given PayPal’s competitive position, new product/vertical opportunities, international initiatives, and strategic M&A,” Devitt added.

According to TipRanks, Devitt ranks near the top of all Wall Street analysts, at No. 97 out of 3,789. Devitt's Buy on PayPal is the 19th such rating on the stock, joining the likes of Deutsche Bank, Barclays and Citigroup. Of note, Piper Jaffray's Gene Munster has a Sell rating on PayPal due to increased competition.