Nomura Securities Maintains a 'Neutral' on eBay (EBAY); Raising PT, But Need More Visibility

July 12, 2012 8:52 AM EDT
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Price: $30.27 -1.21%

Rating Summary:
    28 Buy, 25 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 24 | Down: 17 | New: 14
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Nomura Securities maintains a 'Neutral' on eBay (NASDAQ: EBAY) price target of $42.00 (from $37.50).

Analyst, Brian Nowak, said, "eBay has been one of the strongest performers this year (2,040bp relative outperformance), but over half of the outperformance has come from multiple expansion. In our view, from here on out earnings revisions will matter more to driving the stock. We are modelling a $0.02 (4%) EPS beat in 2Q:12 and are 7% ahead of consensus in 2013, but stay on the sidelines until we get more clarity on two key drivers of higher long-term profitability – PayPal's long-term incremental margins, and the sustainability of the Marketplaces turnaround and incremental wallet share gains. We are adjusting our estimates (higher PayPal margins, FX headwinds and modest Marketplace adjustments) and are now 7% above consensus in 2013. We like the PayPal growth story and improvements seen at Marketplaces, but need better visibility on sources of further material earnings upside from here before looking to turn more positive. F12E EPS from $2.41 to $2.42; F13E EPS from $2.83 to $2.91."

For an analyst ratings summary and ratings history on eBay click here. For more ratings news on eBay click here.

Shares of eBay closed at $39.13 yesterday.

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