eBay Inc (EBAY) Is a Value Internet Play, Says Top Analyst

Aegis lifts price target on eBay, anticipating GMV growth to outclass expectations into next year.


eBay Inc (NASDAQ:EBAY) gross merchandise volume (GMV) growth prospects are looking so promising to top analyst Victor Anthony at Aegis that he has become even more bullish on the online auction giant for the quarters to come.

Expecting the back half of 2017 and 2018 to prove to benefit from core eBay investments generating gains, the analyst reiterates a Buy rating on shares of EBAY while raising the price target up from $42 to $44, which represents a 14% increase from where the stock is currently trading.

Moreover, Anthony continues: “[…] we see StubHub returning to normalized growth post the tough comp quarters and the Classifieds businesses driving increased value for eBay. eBay remains a value Internet play with the shares trading cheaper than the e-commerce group and at a higher FCF yield. Catalysts for the shares include returns from investments in the core (growth accel), capital returns through share buybacks ($3B auth), the longer-term potential to unlock value of StubHub ($2-$3/share) and Classfieds ($4-$6/share), and the possibility of an acquisition of eBay. Our tracker shows that app usage growth (MAUs) increased in each month of 3Q17, including mid-way through September. That signals, as it did last quarter, that GMV growth is likely to meet or exceed our expectations for 6.6% YoY (vs. 6% YoY in 2Q17).”

Believing foreign exchange weakness in the dollar when up against the pound as well as the Euro will translate to better results in the third quarter of 2017, the analyst has boosted his expectations higher, continuing to be more bullish than the Street for both the third quarter as well as into 2018. “The caveat is that we are unsure of the impact from the recent hurricanes, although we believe that any negative impact is likely to be recouped in subsequent quarters as homeowners look to rebuild,” underscores Anthony.

Victor Anthony has a very good TipRanks score with a 66% success rate and a high ranking of #132 out of 4,651 analysts. Anthony garners 14.1% in his yearly returns. When recommending EBAY, Anthony yields 12.9% in average profits on the stock.

Most on the Street are cautiously positive on this internet player, with TipRanks analytics demonstrating EBAY as a Buy. Out of 22 analysts polled by TipRanks in the last 3 months, 11 are bullish on eBay stock, 10 remain sidelined, and 1 is bearish on the stock. With a return potential of nearly 4%, the stock’s consensus target price stands at $40.05.