EBay Now Worth $60/Share, Wedbush Says

In a report published Thursday, Wedbush analysts maintained their Neutral rating on

, while raising the price target from $55 to $60. The company posted better than anticipated results, with the non-GAAP EPS above the consensus, driven by higher margins. The company also reported its revenue above the consensus projections, with constant-currency revenue growth for PayPal at 17 percent and for Marketplace at 3 percent. However, revenue growth has been continuing to decelerate for both these segments. "We believe PayPal will continue to grow at high-teen rates and eBay Marketplace will eventually recover to mid-single-digit growth. However, we remain patient pending the pricing of the two pieces post spin-off," the analysts said. The analysts expect the company to maintain its FY EPS guidance, despite the currency drag, driven by pre-spin-off restructuring in the PayPal and Marketplace businesses, which led to margin growth of 330 bps and 30 bps, respectively. The company has pointed out that the spin-off is likely to occur in Q3, as compared to the previous expectation of 2H, which Wedbush believes means the negotiations could be close to completion. "Separation agreement more favorable to PayPal than our early expectation, with net transfer of $25-$50 million instead of our previous estimate of $100 million… We believe the favorable terms to PayPal help maximize value, considering PayPal will likely end up with a significantly higher multiple," the analysts added.