RBC Capital Positive on eBay (EBAY) PayPal Spin-Off

RBC Capital analyst Mark Mahaney weighed in on eBay (NASDAQ: EBAY) amid news the company will spin-off PayPal, after initially resisting the move. Mahaney views the news as a positive for the stock.

Mahaney cited six keys: 1) Not terribly surprising given management's recent change in tone on the topic, especially with the increasingly vocal investor base; 2) This is a positive and the spin-off unlocks value. We agree with the share price reaction and would expect further appreciation; 3) However, the "stepping up" of CEO Donohoe and CFO Swan are negatives; 4) There is a defensive element to this re: PayPal, coming on the heels of the recent Apple Pay launch; 5) The fact that all the debt will remain with the core eBay Marketplace Business means that PayPal may pursue aggressive strategic actions post the spin; & 6) Transaction implies negative trends for the eBay Marketplace Business, which has been suffering from greater competitive headwinds recently.

The firm maintained Outperform rating and price target of $62.00

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 $52.66 yesterday.

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