PayPal's Oversold Stock Predicted to Rebound Amid Favorable News

Technical Analysis

PayPal Holdings, Inc. (PYPL) last closed at $51.80, having changed 0.75 (1.47%) on October 31, 2023. The stock traded between a low of $50.86 and a high of $51.89 during the day. PayPal's last close was lower than both its 50-day and 200-day moving averages, which stand at $58.72 and $68.12 respectively, indicating a bearish trend. The MACD value of -1.76 signals downward momentum.

The ticker also posted an RSI14 of 28, suggesting that the stock is oversold. Historical volatility, as measured by the ATR, stood at 2.92, which could indicate higher volatility in the stock’s price in the near term. The stock’s closest levels of support and resistance lie at $51.75 and $59.47 respectively. In terms of the year's price performance, the stock has traversed a low of $50.25 and a high of $92.62.

Fundamental Analysis

PayPal Holdings, Inc. has a market capitalization of $56.66 billion with approximately 1.10 billion shares outstanding. The company reported an earning per share (EPS) of $3.57 and carries a price-to-earnings (P/E) ratio of 14.45, indicating the stock is fairly priced.

Analysts offer predictions for the stock that varies quite a bit, with a low target of $72 and a high target of $290; consensus points to a more moderate target of $128.21. Furthermore, the stock receives substantial backing from analysts with 22 suggesting a 'buy' and 9 a 'hold', with no recommendations to 'sell', making the consensus leaning strongly towards a 'buy'. The discounted cash flow (DCF) figure of $58.31 indicates that the stock might be undervalued.

On the news front, PayPal is set to release its Q3 earnings report. Analysts forecast EPS of $1.22 for Q3, a year-over-year improvement of 13% and a revenue rise of 8% to $7.39 billion as per Zacks’ Equity Research. In addition, PayPal has received approval from the UK's Financial Conduct Authority to offer crypto-asset activities. This milestone may pave the way for new revenue streams.

Price Prediction

Considering the technical and fundamental analysis, as well as recent favourable news (including approval to handle crypto-asset activities in the UK), PayPal's stock price could potentially rebound from its current oversold condition. The next trading session may witness a mild increase in stock price.

For the upcoming week, taking into consideration current market conditions, the consensus 'buy' recommendation and approval to handle crypto-asset activities in the UK, the price is expected to trend upwards, albeit potentially at a limited pace due to the bearish market trend from existing moving averages.

Final Evaluation

Given the stock's current oversold position and potential for substantial growth (as indicated by analysts’ consensus target of $128.21), it seems like a beneficial idea to 'Hold'. However, this 'Hold' recommendation is contingent upon a thorough understanding of the company's upcoming earnings announcement and subsequent market reaction.

It is essential to note that this analysis should be supplemented with thorough personal research and the consultation of a financial advisor, where appropriate.