On Wednesday, Citi reaffirmed its Buy rating and $75.00 price target for eBay stock, which currently trades at $69.24 and near its 52-week high, following the announcement of a strategic partnership with Meta Platforms (NASDAQ:META), Inc. This collaboration will integrate eBay listings into Facebook Marketplace, potentially broadening eBay's customer base. According to InvestingPro, eBay has demonstrated strong momentum with a 50.32% return over the past year.
eBay's integration into Facebook Marketplace means that while eBay listings will be displayed on the social media platform, eBay will manage all aspects of the transactions, from product inquiries to payment processing. This move is expected to significantly increase visibility for eBay sellers due to the vast audience of Facebook Marketplace, which boasts over 1 billion monthly visitors.
In contrast, eBay reported having 133 million active buyers in the third quarter of 2024, indicating a substantial opportunity for growth through this partnership. Citi analysts predict that the partnership will be a net positive for eBay and its business-to-consumer (B2C) and consumer-to-consumer (C2C) sellers. They note that Facebook remains the world's largest social commerce platform, a status confirmed by data from eMarketer.
From the perspective of Meta Platforms, the partnership with eBay is perceived as less material. However, Citi analysts suggest that an increase in listings on Facebook Marketplace could enhance user engagement, which is particularly important for reconnecting with younger demographics. Additionally, the potential for increased ad revenue from boosted listings is seen as a positive outcome for Meta.
In other recent news, eBay Inc (NASDAQ:EBAY). and Meta Platforms are set to begin trials in the U.S., Germany, and France, allowing some users to browse eBay listings on Facebook Marketplace. Transactions will still be finalized on eBay, which could potentially increase visibility for eBay sellers among Facebook users. In addition to these developments, eBay has expanded its stock repurchase program by an additional $3 billion, indicating the company's intent to deliver value to its shareholders.
Bernstein, a research firm, has maintained its positive outlook on eBay shares, citing the company's history of consistent buybacks and anticipated growth of eBay's Gross Merchandise Volume (GMV). Bernstein also suggests that the timing for investing in eBay may be more favorable following the fourth-quarter earnings call.
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