EBay Q1 Results Leave Analysts Sitting On Fence - eBay (NASDAQ:EBAY)

Slowing first quarter growth at

eBay Inc

EBAY

caused at least several analysts to remain on the fence Thursday. The e-commerce company beat Wall Street's earnings expectations by 10 percent, sending its stock up recently by 3.6 percent, to $58.80. The earnings beat derived from cost-cutting and a lower share count, while revenue growth at its Marketplaces unit slowed to 3 percent in the first quarter, from 5 percent in the previous period. Revenue growth at eBay's PayPal unit, set for a third quarter spinoff, declined three points to 17 percent in the recent period. Both SunTrust's Bob Peck and Wedbush's Gil Luria raised their price targets on eBay Thursday, but maintained Neutral ratings on the stock. Morgan Stanley's Brian Nowak kept his Equal-Weight rating and $52 target intact and said heavy spending will be required at both brands to stabilize growth. PayPal may ultimately win out in looming competition with

Apple Inc. AAPL and Google Inc GOOGL, but the required investments will result in narrower profit margins, Nowak said. EBay expects its Marketplaces revenue will grow this year by between zero and 5 percent, but Nowak said the company's low exposure to so-called millennials - or adults born after about 1980 - could result in disappointments. Luria boosted his eBay target 9 percent, to $60, and said eBay's recently disclosed separation agreement will leave PayPal with a higher-than-expected transfer of cash. Peck increased his target 8.8 percent to $62, based on updated estimates for PayPal and Marketplaces, plus a value of between $1 billion and $1.5 billion for eBay's Enterprise unit, which the company is reviewing for a possible sale.

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