A sign is posted outside of the PayPal headquarters in San Jose, California.

PayPal shares will rise due to the strength of its core payment platform, according to Jefferies.

The firm reiterates its buy rating for PayPal shares, predicting it will grow faster than the e-commerce industry.

"PayPal core business trends are showing impressive growth. We believe that PayPal is in a unique position in the payment ecosystem with a strong and growing set of direct relationships with a large number of both consumers and merchants," analyst John Hecht said in a note to clients Wednesday. "We expect PayPal to continue to outpace broader e-commerce industry volume growth rates given PayPal's broad consumer base and extensive merchant footprint."

PayPal share rose 2 percent Wednesday.

Hecht raised his price target to $110 from $100 for PayPal shares, representing 21 percent upside to Tuesday's close.

The analyst said PayPal had 244 million active registered account at the end of June, a 13 percent annual growth rate since 2008. In addition, he noted the company's mobile total payment volume ex-Venmo grew 40 percent and, daily active users for PayPal's mobile app was about 600,000 in the second quarter.

"The rapid growth in active accounts has driven continued transaction and [total payment volume] growth," he said. "App Data shows PayPal platforms still have significant share and usage."

PayPal shares are up 23 percent this year through Tuesday versus the S&P 500's 8 percent return in the same time period.