eBay (EBAY) Buy Rating Reiterated at Cantor Fitzgerald

Cantor Fitzgerald reiterated a Buy rating on eBay (NASDAQ: EBAY) with a price target of $63. Earlier eBay said it plans to spin off off PayPal. Analyst Youssef Squali expects the transaction will unleash potential.

"Today's announcement is in line with our stated belief that changing market dynamics and lackluster performance in core Marketplaces would cause management to split off PayPal sooner rather than later, offering investors a unique opportunity to invest directly in a leading pure-play, rapidly growing online payment provider. While our sum-of-the-parts analysis alone justifies the move, we view the potential for PayPal's accelerating growth and its strategic importance in online payments/ecommerce ecosystem as key drivers of value longer-term," said Squali.

"Our SOP analysis yields $63/share fair value and assumes 18.0x FY:15 EBITDA for PayPal (using as proxy Visa and MasterCard, which trade 15-16x fwd EBITDA with 10-12% top-line growth). Our SOP also assumes 6.0x and 4.0x FY:15 EBITDA for Marketplaces and Enterprise, respectively (Exhibit 2), and excludes potential revenues from having PayPal integrate with other commerce platforms," he added.

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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