Carl Icahn, the activist investor, argued that PayPal was “shrouded by a conglomerate discount.”
Today we can say Icahn was right.
PayPal started trading today with the ticker PYPL and by midmorning Eastern Time, the company’s market cap neared $47 billion, while eBay, its former parent company, was valued at $34 billion. Together, eBay/PayPal was valued at around $68 billion.
PayPal’s $47 billion market cap nestles it below Visa ($176 billion), MasterCard Inc ($111 billion), and American Express ($81 billion), but ahead of FIS ($18 billion) and Vantiv Inc ($7.5 billion). PYPL has largely been getting positive reviews from stock research houses. Here’s the view from Cantor Fitzgerald, for example, as of last Thursday:
PayPal’s large addressable opportunity both on and offline, strong brand and leading position online, and its expectation for mid-teens growth over the next 3 to 5 years are key reasons why [Cantor] finds the shares compelling at current levels. Cantor expects PayPal’s TPV and revenue growth to be driven by a number of factors including increased active user and global expansion. PayPal has made several moves to expand and strengthen its position within new emerging segments, each with a distinct growth profile. …
The Street is mainly bullish on PayPal. Out of five analysts who cover the stock, three suggest a “Buy,” while two indicate a “Hold.” The 12-month average target price stands at $43.06, implying upward potential of 24.1 over the trading price of $36.49 as of 09:56 AM EDT.
The stock is trading at 10:32 am ET at $40.45 per share.