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EBay Shares Drop on Analyst Remarks About Guidance

EBay's guidance for low-double-digit growth in gross merchandise volume was 'underwhelming,' Deutsche Bank says, cutting its price target.
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EBay  (EBAY) - Get eBay Inc. Report shares fell Thursday amid analyst comments after the online retailer offered weaker-than-expected fourth-quarter guidance after a strong third quarter.

Shares of the San Jose, Calif., company recently traded at $48.54, down 8.9%. They've climbed 35% year to date.

Kunal Madhukar of Deutsche Bank cut his share-price target to $59 from $64 and affirmed his buy rating. “The fourth-quarter guide -- of low-double-digit [gross merchandise value] growth, down from 21% in the third quarter -- was underwhelming,” he wrote in a commentary cited by Bloomberg.

At Raymond James, analyst Aaron Kessler kept his market-perform rating. 

“While we are encouraged by a healthy third quarter, slowing near-term trends are likely to be an investor concern,” he wrote in a commentary cited by Bloomberg. Growth overseas slowed in the third quarter, thanks to a loosening of mobility restrictions, he said.

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Brent Thill of Jefferies has a hold rating on eBay, with a share-price target of $58.

“EBay’s relevance to consumers in a normalized environment continues to be a key concern,” he wrote in a commentary cited by Bloomberg. The stock’s valuation sits one standard deviation above the historical average, indicating further gains are already priced in, he said.

Ygal Arounian of Wedbush maintained his outperform rating and raised his share-price target to $65 from $64. But “investors were likely looking for more upside in gross merchandise volume in the fourth quarter,” he said.

Morningstar analyst R.J. Hottovy expressed optimism, writing, “while current trends aren't likely to sustain over the next five years, we continue to see a path to high-single-digit top-line growth.” 

He said he’s likely to boost his fair-value estimate to $53 or $54 from $52 currently.