BofA Met With eBay Management: Here's How Analysts Feel After

BofA Merrill Lynch analysts said that their meeting with eBay Inc EBAY CFO Scott Schenkel and Director of IR Selim Freiha highlighted the company’s “return to the core.” eBay seems to be refocusing on smaller sellers with differentiated items, turning away from mainstream ecommerce.

In a report published Friday, analyst Justin Post maintained a Buy rating and a price objective of $33. He said that Mr. Schenkel had remained “cautious on the near-term growth but was optimistic on long-term structured data, social marketing and balance sheet opportunities.”

eBay seems to be taking a number of initiatives to improve the Marketplace. Post added, however, that “quick acceleration in growth” was unlikely, given the pressure on TTM. The biggest initiative that was discussed was cataloging and structured data, which is designed to “permanently improve both search engine rankings and the eBay user experience.”

The EPS estimate for 2015 has been raised from $1.75 to $1.79. The revenue and EPS estimates for 2016 have been reduced from $9.0bn to $8.94bn and from $1.94 to $1.88, respectively, to reflect lower share buyback accretion.

In the report BofA Merrill Lynch noted the upside drivers to the 2016 estimates as:

• Accretion in growth on easy comps
• Margin expectation
• More aggressive share repurchase activity