Reacceleration Needed for eBay; Price Target Lowered

In a reports published Friday, SunTrust analyst Robert S. Peck, CFA lowered the 2014 price target for eBay

from $63 to $59. Peck lowered the EPS multiple due to “the challenging European marketplace, the competitive landscape for PayPal offline and on mobile, as well as the reacceleration implied in 2015 guidance.” Despite PayPal's growing revenue, there was a decline in Marketplaces revenue growth. Overall organic growth has decelerated from the previous 2011-2012 year. “Guidance for 3Q 2013 revenue was at the low end of expectations and earnings of $0.61-$0.63 were light.” eBay's management discussed the decrease of ecommerce in Germany, Korea, and the UK in the report. Peck notes that this valuation could increase pending on “management's success in the newer initiatives.” eBay closed at $51.95 on Thursday, September 5th.