What's Baked Into Cantor's Reduced Price Target on eBay?

Youssef Squali of Cantor Fitzgerald reduced his eBay price target to $60 from $63 after the company reported in line results but used the strength in Paypal to offset weakness in Marketplaces. This price target bakes in a stable, but not growing, Marketplaces business, a slowing Paypal business and the existing acive $2 billion buyback. Importantly, this price target does not include possible upside from integrating with other commerce platforms which the whole reason Paypal is being spun out. Analysts are looking to traditional businesses such as Visa and MasterCard to find appropriate valuations for Paypal after the coming spinoff. These trade at 15-16 times forward year EBITDA and are growing their top lines at 10 - 12%. Squali believes Paypal should trade at a premium and warrants a valuation of 18x. The traditional Marketplace and Enterprise businesses, on the other hand, only warrant multiples of 5x and 4x EBITDA respectively.