From a valuation standpoint, stripping the frame and repainting it would be about the dumbest thing you could possibly do, short of backing your car over it.

Stripping and repainting is a lot of work, and costs quite a bit even if you do it yourself. Then you lose the original decals. All that original stuff is gone forever. Original Peugeots will continue to go up in value in the years to come, even lower end ones. Once you strip it of its original decals and finish (and spend time and money to do so), the value is gone. Replacement decals are not cheap, and they are reproductions, not original, so again, the value is less.

Your frame finish appears to be in very good shape, that is probably most of the value of this bike (it has low end cheap components, etc.). So you would be ruining the one part that gives this bike value, and spending time and money to do it.