eBay Lower on Downgrade

Shares of eBay (EBAY) are down about 4% after the online auction house was downgraded by Piper Jaffray.

The firm reiterated an “underweight” rating with a $50 price target.

Analysts believe investor optimism will rise into the PayPal spin-off this fall, but will fall after the move.

Piper added that half of PayPal’s payments will be through mobile devices by the end of 2016 amid greater competition from Google’s (GOOGL) Android Pay and Apple’s (AAPL) Apple Pay.

eBay gave guidance for the PayPal spinoff. They see sales growth of 0% to 5% for eBay with operating margin between 32% and 34%. For next year, they again project revenue growth of 0% to 5% but operating revenue of 31% to 35%. For PayPal, they project revenue growth of 15% to 18% with operating margin between 20% and 21%.

You can see the investor presentations here and here.

Posted by on June 8th, 2015 at 1:46 pm


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