KeyBanc Adds eBay To Cart On Accelerated GMV

There’s one discounted eBay Inc EBAY item KeyBanc Capital Markets is keen to get its hands on — its stock.

The Rating

KeyBanc Capital Markets analyst Edward Yruma assumed coverage of eBay with an Overweight rating and $50 price target.

The Thesis

KeyBanc considers eBay a “destination for deals,” with products selling at a 23-percent discount to competitors, Yruma said in a Tuesday note. 

“eBay has successfully transitioned to a destination for compelling prices, and initiatives to enhance customer experience and attract brands should lead to continued GMV acceleration in 2018,” the analyst said. 

Product authentication and brand willingness to push excess inventory through the channel are expected to further improve eBay’s standing, according to KeyBanc. 

At the same time, the recent integration of artificial intelligence, structured data and promoted listings into eBay’s strategy will improve search results, accelerate marketplace revenue and ultimately drive gross merchandise volume from 2.3 percent to 5.8 percent, Yruma said.

KeyBanc forecast GMV acceleration to 10.5 percent in 2018 accompanied by 11-percent revenue growth.

“Additionally, newly rolled out, AI-enabled customer support on desktop and mobile should create additional cost efficiencies over time," Yruma said. 

KeyBanc considers the stock, which trades at a 10-percent premium to the S&P 500, attractive against both discount and marketplace peers.

Price Action

Shares of eBay were up 2.2 percent after the open Wednesday. 

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