eBay Shares Increase After Upgrade
Investing.com – Shares in eBay (NASDAQ:EBAY) edged higher on Tuesday after analysts at Bernstein upgraded their rating of the e-commerce group to "Outperform" from "Market-Perform."
Last week, eBay unveiled a fourth-quarter forecast that missed Wall Street expectations, indicating that customers were reducing spending on collector's items and refurbished goods amid ongoing cost-of-living pressures.
The outlook for the US economy remains uncertain despite signs of resilience. Consumers are cautiously spending, with analysts noting demand issues for higher-priced discretionary items.
After the forecast announcement, eBay’s stock price slumped. The current-quarter revenue guidance range set by eBay was between $2.53 billion to $2.59 billion, below the average estimate of $2.65 billion, according to LSEG figures cited by Reuters.
CFO Steve Priest mentioned that the guidance reflects a "challenging operating environment" due to persistent economic headwinds, one-off impacts from the US election, a shorter holiday shopping period, and Hurricane Milton in October.
However, Bernstein analysts, led by Nikhil Devnani, stated that the stock price's pullback presents a "better entry point" for investors. Despite concerns over competition, the company's renewed focus on appealing to its core audience is reportedly helping to drive modest growth in gross merchandise value (GMV).
GMV, an essential measure of demand, increased by 2% to $18.3 billion in eBay's third-quarter.
The analysts expressed encouragement about eBay's GMV growth and projected low single-digit growth (around 2%) into 2025, hoping for accelerated growth afterward. They believe that showing the market its "steady growth" potential offers upside for the stock, despite the current modest growth rates.
(Reuters contributed reporting.)
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