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Investing.com -- BMO Capital Markets upgraded eBay (NASDAQ:EBAY) to Outperform from Market Perform, citing stronger-than-expected growth in its Focus Categories and signs of a structural turnaround.
The firm raised its price target to $102 and lifted GMV forecasts for 2025 and 2026.
eBay’s Focus Categories grew 10% year-over-year in Q2, up from 6% in Q1, with all segments showing acceleration.
BMO pointed to Collectibles, particularly trading cards, and Parts & Accessories as key drivers, calling the performance “a clear indication of an inflection in the business.”
The upgrade follows eBay’s Q2 results, which beat consensus with GMV and net revenue coming in 3.4% and 3.2% ahead of estimates, respectively.
Guidance for Q3 GMV of $19.2–19.6 billion also exceeded Wall Street expectations, despite accounting for tariff headwinds and the end of the de minimis exemption.
BMO also noted a fourth straight quarter of growth in active buyers, now at 134 million, reversing a multi-year decline. Integration with Klarna is seen as a tailwind.
Advertising remains an underdeveloped opportunity, with ad revenue at just 2.5% of GMV. Management expects that figure to reach 3% in the medium term, with room for expansion over time.
The brokerage raised its 2025 buyback estimate to $2.5 billion and sees valuation as modest at 13.5x FY26 earnings, slightly above the 10-year average.