Top analysts are coming out to bat for two key online auction heavyweights: Amazon.com, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY). Piper Jaffray’s analytics reveal a bit of a comeback in store for Amazon in the second quarter, whose unit growth will not be dipping this time around. Likewise, the second half of the year looks good for eBay from the eyes of Baird, who believes new marketing strategies will strengthen the core of the site, offering the kind of rapid-fire growth that could drive share value and put investors more at ease. Let’s dive in:
Amazon Gets a Price Target Lift
Top analyst Michael Olson at Piper Jaffray sees continued “healthy” Amazon unit growth after performing a proprietary analysis of Google search trends using his Data Analytics platform. Retail unit growth may have seen a 24% decline in the first quarter, but the second quarter is looking strong in comparison, with barely if any signs of deceleration. In reaction, the analyst reiterates an Overweight on shares of AMZN while boosting the price target to $1,200, which represents a close to 25% increase from where the stock is currently trading.
“Street estimates also assume little to no FXN retail revenue deceleration; therefore, our analysis suggests Amazon retail is tracking for an in-line quarter. This proprietary analysis has 0.95 correlation with reported unit growth and is, in our view, the strongest indicator of QTD trends for Amazon. We believe strength in retail unit growth is being driven by share gains from Prime Now, continued tailwinds from Prime adoption, international expansion/penetration, and hardware tailwinds (Echo). We continue to believe that Amazon is the best positioned large cap internet platform for the next 5+ years and are raising our price target to $1,200,” surmises Olson, betting on the online auction and e-commerce leader for the long-term.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, top five-star analyst Michael Olson has achieved a high ranking of #86 out of 4,570 analysts. Olson upholds a 66% success rate and garners 16.6% in his annual returns. When recommending AMZN, Olson gains 19.4% in average profits on the stock.
TipRanks analytics exhibit AMZN as a Strong Buy. Out of 31 analysts polled by TipRanks in the last 3 months, 28 are bullish on Amazon stock and 3 remain sidelined. With a return potential of 15%, the stock’s consensus target price stands at $1,109.77.
eBay Shares Still Have Potential Growth Catalyst
After evaluating marketplace trends to be “stable” with momentum to continue through May, top analyst Colin Sebastian at Baird is out with a bullish research note on eBay, reiterating an Outperform rating on EBAY with a price target of $38, which represents a just under 12% increase from where the stock is currently trading.
Sebastian notes, “Our tracking of eBay.com GMV suggests Y/Y growth trends slightly improved from April, although in line with our expectations following the Easter calendar shift. While our tracker tends to report growth rates higher than reported by eBay, we note that directional trends are correlated. As such, we believe Q2 trends to-date are in line with estimates, with a potential lift in growth in 2H from re-platforming and marketing initiatives.”
Therefore, as the online auction giant evolves to a third quarter filled with a greater amount of “direct response” ads, the analyst wagers, “At this point, eBay remains poised, in our view, to demonstrate improving growth trends in 2H-17, which could be a positive catalyst for the stock.”
Ultimately, “We continue to expect a combination of increasing visibility through refreshed advertising campaigns and gradual improvement to the core eBay site/app should drive modest acceleration in GMV growth through the year. Along with ongoing skepticism among investors regarding eBay’s ability to ‘fix’ the site, we still view faster growth as a potential catalyst for shares,” the analyst contends.
Sebastian has a very good TipRanks score with a 79% success rate and a high ranking of #13 out of 4,570 analysts. Sebastian realizes 23.4% in his yearly returns. When suggesting EBAY, Sebastian yields 15.2% in average profits on the stock.
TipRanks analytics show EBAY as a Buy. Based on 18 analysts polled by TipRanks in the last 3 months, 8 rate a Buy on eBay stock while 10 maintain a Hold. The 12-month average price target stands at $37.00, marking a nearly 9% upside from where the stock is currently trading.