3 eBay Analysts Express Concern On Q4 Outlook, Long-Haul Recovery: Here's Why

Zinger Key Points
  • Expectations had already been tempered after eBay lowered its guidance for the back half of the year, one analyst said.
  • Gross merchandize value (GMV) weakness suggests recovery may take longer, another analyst stated.

eBay Inc EBAY reported its quarterly earnings at $1.00 per share, beating Street expectations of 93 cents per share but faced several price target cuts by various analysts.

Morgan Stanley

Analyst Lauren Schenk reiterated an Underweight rating, while raising the price target from $33 to $34.

“3Q GMV and operating income were slightly better than expected on select category outperformance in Europe and one-time lower transaction losses,” Schenk said.

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“Europe, and now US, GMV weakness leaves us concerned that trends may take longer to recover,” the analyst wrote. “Perhaps the 4Q guide was slightly better than bearish buy-side expectations, but unless '23 Street numbers are reset after tonight's print, we still see the need for out-year estimates to come down meaningfully.”

Raymond James

Analyst Aaron Kessler reiterated a Market Perform rating on the stock.

eBay reported an earnings beat, driven by “strength in focus categories and advertising as well as continued disciplined spending,” Kessler wrote in a note.

However, the company’s fourth-quarter growth projection for gross merchandize value was soft due to continued macro pressures.

“We remain optimistic on eBay’s improved execution though we expect shares to remain range-bound near-term given the soft GMV growth outlook and more uncertain macro backdrop,” he added.

Credit Suisse

Analyst Stephen Ju reaffirmed an Outperform rating, while reducing the price target from $56 to $55.

“As eBay had already lowered 2H22 guidance on anticipated macro weakness in the EU, expectations were already well tempered,” Ju mentioned.

“While we suspect macro uncertainty will remain an overhang, mgmt. provided some guidelines for FX – if the USD strength holds, GMV/EPS headwinds will be 3%/5-6% respectively – this should provide some rationale to look through the potential downturn and focus on factors within eBay’s control, namely 1P advertising and payments,” the analyst further said.

EBAY Price Action: Shares of eBay had risen by 4.97% to $39.95 in premarket trading on Thursday.

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Posted In: Analyst ColorEarningsNewsPrice TargetReiterationTop StoriesAnalyst RatingsMoversTrading IdeasAaron KesslerCredit SuisseLauren SchenkMorgan StanleyRaymond JamesStephen Ju
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