eBay stock price target raised to $101 from $89 at BofA Securities

Investing.com - BofA Securities raised its price target on eBay (NASDAQ:EBAY) to $101.00 from $89.00 on Monday, while maintaining a Neutral rating on the e-commerce company’s stock. The new target approaches eBay’s 52-week high of $101.15, with the stock currently trading at $99.14. According to InvestingPro data, eBay has delivered impressive returns, with the stock up over 71% in the past year.

The firm noted that eBay’s U.S. Gross Merchandise Volume (GMV) grew 7% year-over-year to $9.4 billion in the second quarter, representing a 6-point acceleration compared to the previous quarter. This growth helped eBay increase its e-commerce market share by 10 basis points year-over-year to 3.2%. The company’s strong execution is reflected in its impressive gross profit margin of 71.9% and total revenue of $10.47 billion over the last twelve months.

BofA Securities highlighted that eBay’s Focus Category growth accelerated to 10% year-over-year, outpacing core categories which grew at 1%. The firm specifically mentioned strength in trading cards, which benefited from a favorable product calendar for collectibles during the quarter.

Strategic AI initiatives were also cited as growth drivers, including improvements to product listing ad titles on Google, personalized email communications, and listing image quality upgrades. For the third quarter, eBay guided total GMV growth to 5%-7% year-over-year, indicating sustained healthy U.S. consumer trends.

The price target increase from $89 to $101 reflects recent sector multiple expansion, with BofA Securities applying a 22x GAAP P/E multiple, up from 20x previously. Despite being constructive on quarter-to-date data, the firm maintained its Neutral rating, noting that eBay’s growth continues to lag peers in the "Big-5" e-commerce companies. Based on InvestingPro’s comprehensive analysis, eBay appears overvalued at current levels. For deeper insights into eBay’s valuation and growth prospects, including 8 additional ProTips and detailed financial metrics, check out the Pro Research Report available on InvestingPro.

In other recent news, eBay has reported a strong second-quarter performance, which has led to several analyst firms adjusting their price targets. CFRA raised its price target to $107, citing a significant acceleration in U.S. gross merchandise volume (GMV) and robust consumer demand across eBay’s platform. Benchmark also increased its price target to $100, highlighting that eBay exceeded both second-quarter expectations and its own prior guidance. Stifel raised its price target to $75, noting a 10% year-over-year growth in focus category GMV and resilient U.S. consumer spending.

Additionally, eBay has introduced a new policy offering free returns for vehicle parts and accessories, addressing a common concern among buyers of automotive components. This policy allows returns within 30 days at no cost for most eligible items. Meanwhile, JMP Securities has reiterated its Market Perform rating on eBay, pointing out specific growth areas benefiting the company’s business performance. These developments reflect eBay’s ongoing efforts to enhance its marketplace and respond to consumer needs.

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