eBay Price Target Raised by SunTrust

eBay, Inc. EBAY received a Price Target change on Wednesday from $58 to $60 by SunTrust.  SunTrust maintained its Neutral rating.

 

The change came after news that eBay will separate its Marketplace and Payments business.  Analysts led by Robert S. Peck thought this action will be a positive for the shareholders.

 

According to Peck, the decision to separate eBay and PayPal will allow the businesses “1) to be more nimble, 2) pursue revenue synergies, 3) have a currency for hiring and M&A, 4) create better alignment with goals of different investors, and 5) potentially unlock asset value via the spinoff.”

 

Peck suggested that questions remain regarding the management’s thinking as well as both synergies and dis-synergies that will come from the spin-off.  

 

Their spin-off analysis showed that “asset spins are positive for shareholders” on average, with the parent outperforming the market by 21% and the Spin outperforming by 27%.

 

eBay, Inc. closed at $56.63 on Tuesday.