Jefferies Adds PayPal To Franchise Pick List After Macy's Contract Win

• The share price of Paypal Holdings, Inc. (NASDAQ: PYPL) has declined 8.16 percent in the past three months, touching a low of $30.63 on September 29.
• Jefferies’ Jason Kupferberg has maintained a Buy rating on the company, with a price target of $44.
• Kupferberg believes that the stock is oversold and had added it to Jefferies’ Franchise Pick list, while mentioning that PayPal’s first quarterly report as a stand-alone entity could prove to be a positive catalyst for the stock.

Analyst Jason Kupferberg mentioned that PayPal was scheduled to report its first quarter results as a stand-alone company on October 28, which would prove to be an indicator of the company’s execution capabilities.

Although the shares have been pressured over the last two months, Kupferberg believes that if PayPal “reports a solid 3Q and again reiterates its guidance for 2015 as well as its medium-term outlook (both of which we think are likely), this should be a positive catalyst.”

The company has announced in September that it had won Macy's, Inc. (NYSE: M) as a new omnichannel client. “This new win covers the online, in-store, and in-app channels, reflecting PYPL's omnichannel strategy,” the Jefferies report said.

Transitioning into a stand-alone company has provided PayPal the potential to sign up other large clients, Kupferberg believes.