On Wednesday, BMO Capital Markets adjusted its share price target for eBay (NASDAQ:EBAY), increasing it to $53.00 from the previous $49.00, while maintaining a Market Perform rating for the company.
The firm acknowledges eBay's focus category Gross Merchandise Volume (GMV) growth of 4% year-over-year, outpacing the overall marketplace by 6 percentage points. Despite this, markets in Germany and the United Kingdom continue to face challenges due to broader macroeconomic factors, which have tempered the overall sentiment.
BMO Capital Markets does not anticipate a positive inflection in overall GMV for eBay until at least the second half of 2024. However, the firm has noted an operating margin expansion forecasted between 60 to 100 basis points for the year 2024. This expansion is attributed to eBay's investments in enhancing the buyer and seller experience, as well as the introduction of general artificial intelligence tools that resonate well with users.
The revised price target of $53 takes into account the cost reduction efforts eBay has implemented. Additionally, the company's plans for a $2 billion share repurchase in the year 2024 have been factored into the new target, signaling confidence in eBay's financial strategy and the potential for shareholder value enhancement.
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