PayPal Holdings, Inc. (PYPL) plans to start an industrial bank to boost lending capabilities, potentially driving stock up by 17%. Stock is currently at $61.16, down from recent highs. Strong free cash flow and adjusted FCF margins make it undervalued. Analysts project a potential upside of around 30% from current levels.

PayPal reported Q3 revenue up 7.26% YoY to $8.417 billion, with an impressive operating income rise. Adjusted FCF increased by 47.9% YoY to $2.278 billion. This represents 27.1% of Q3 revenue. Projecting future FCF suggests a potential value of $72 per share, 17.75% higher than the current price.

Analysts predict a significant upside for PYPL stock, estimating price targets around $79-$80 per share. The stock appears undervalued, presenting a buying opportunity. Shorting OTM puts and buying ITM calls can be strategies to capitalize on potential upside. Overall, PYPL looks like a strong investment opportunity.

Read more at Barchart: PayPal’s Strong Free Cash Flow and Margins Could Push PYPL +17% Stock Higher