NEW YORK (TheStreet) -- Shares of PayPal (PYPL) - Get Report advanced over 5% yesterday in the stock's first day of trading following a split from eBay (EBAY) - Get Report, with the majority of research firms issuing optimistic notes on its prospects. This morning, however, analyst Gene Munster of Piper Jaffray recommends selling the share as competition grows in the digital payments space.

BEARS: Munster started shares of PayPal with an Underweight rating, the firm's equivalent of a "Sell," saying increased competition could pressure the stock's multiple over the next 6-24 months. Google's (GOOG) - Get Report Android Pay and Apple's (AAPL) - Get Report Apple Pay will give consumers a "real alternative to PayPal" for the first time, Munster tells investors in his research note. In addition, interest in payments from Amazon.com (AMZN) - Get Report and Facebook (FB) - Get Report bring potential for more digital wallet offerings, the analyst notes. Munster set a $30 price target for PayPal. Of note, Evercore ISI also started coverage of PayPal shares yesterday with a Sell rating.

BULLS: Wells Fargo initiated coverage of PayPal yesterday with an Outperform rating, saying the company's unique assets will enable it to maintain its leadership role in digital payments and benefit from the growth of e-commerce. Also upbeat was Robert W. Baird analyst Colin Sebastian, who contends that PayPal has the top pure play online payment system and is continuing to grow its share of the Internet payment market. PayPal should be able to innovate more effectively after its spin-off, added the analyst, who set a $45 price target on the shares.

PRICE ACTION: Shares of PayPal are pointing toward further gains in their second day of standalone trading, with the stock up about 2.7% to $41.55 in pre-market trading.

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