With Amazon.com shares up more than 30% year to date, investors are taking a fresh look at eBay, assessing whether the e-commerce marketplace might also benefit from the widespread consumer adoption of online shopping. And eBay’s has added attractions, including a new CEO and an avowed interest in selling some substantial parts of the company.
Mizuho Securities analyst James Lee on Monday upped his rating on eBay shares (ticker: EBAY) to Neutral from Underperform, while lifting his price target to $42, from $33.
The appointment earlier this month of former Wal-Mart e-commerce executive Jamie Iannone as e-Bay’s CEO should help accelerate the company’s strategic review process, Lee says. eBay recently sold StubHub, its former ticketing unit, and has been shopping its Classified advertising business.
The company could also shed G-Market, its Korean e-commerce business, “since it is not integrated into the core eBay platform and the ecommerce industry in Korea is poised for consolidation,” Lee says. G-Market could be worth close to $4 billion, or about $5 a share; he values the Classified unit at $7 billion, or about $8 a share.
Meanwhile, Deutsche Bank’s Kunal Madhuklar today repeated his Buy rating on eBay shares, lifting his target to $42, from $37. He thinks the company is benefiting from the Covid-19 situation, with a shift to work-from-home “helping all ecommerce platforms and bringing new buyers to online.” He adds that Amazon’s (AMZN) immediate focus on essential products “has alleviated the competitive intensity for other online players.”
SunTrust Robinson Humphrey’s Youssef Squali is more cautious on the stock, keeping his Hold rating and $38 price target. “Covid-19 has had a positive impact on eBay at the tail-end of the first quarter and into the second quarter, but sustainability of these trends remains in question,” he says. Given the newness of CEO Iannone, don’t expect a strategic update on the first quarter earnings call, he says, but the “capital returns program and payments remain bright spots.”
On Monday, eBay shares are up 1.5%, to $39.94.
Write to Eric J. Savitz at eric.savitz@barrons.com
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New eBay CEO Should Help Boost the Stock - Barron's
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