Stand-Alone PayPal (PYPL) Gets Wall Street Love

PayPal's (NASDAQ: PYPL) first day of 'regular way' trading following the eBay (NASDAQ: EBAY) spin-off is off to a good start. Shares of the online payment giant are up 5.9% to $40.65 shortly after the opening of trading, which puts the market cap above $50 billion.

A number of Wall Street firm's launched stand-alone coverage on the stock amid the debut - all but one was positive.

SunTrust Robinson Humphrey analyst Bob Peck, who launched with a 'Buy', sees two tailwinds following the separation: 1) Independence from eBay should allow PayPal to now pursue merchants and marketplaces (potential catalysts) that are competitive with eBay, with that conflict of interest now removed. 2) Any resurgence at eBay (still 24% of PayPal TPV) post separation also benefits PayPal.

Peck also sees PayPal's immediate revenue total addressable market (TAM) of B2C e-commerce more than $45 billion. However, he said total "stretch" TAM could be $500 billion, when including: B2C, remittance, B2B, in-store. Also, with more than $6 billion in cash and the option to raise approximately $5 billion in debt, the company has ample capacity to fund M&A and investments.

Baird analyst Colin Sebastian, echoed the large growth opportunities for the company, but sees an even larger addressable market. "We note that the combination of e-commerce, digital content, mobile top-up, money transfer, and other non-traditional payments provide well over $1 trillion of addressable market opportunities," he said. "In-store payments would add trillions more." He rated shares at Outperform to start.

Evercore ISI's Ken Sena was the lone dissenter. Sena launched coverage of PayPal with a Sell rating and $36 price target. The analyst voiced concerns about the relevancy of PayPal in a mobile-first world. "While we do recognize that their business is moving in a direction favoring merchant acquiring, peer-to-peer, and remittance, and we look forward to working with the Fin Tech team on these newer areas of focus, we nevertheless expect pressure to its core networking revenues where its higher-margin ACH funding factors much more materially," he said.

PayPal's overall rating now stands at Buy with a rating store of 7.7 out of 10, according to Ratings Insider.

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