eBay (EBAY) Outlook 'Disappointing', Evercore ISI Says; PT Cut to $47
Evercore ISI analyst Ken Sena reiterated a Sell rating and lowered his price target on eBay (NASDAQ: EBAY) to $47.00 (from $49.00) calling the outlook "disappointing" and noting weakening business trends.
Sena commented, "eBay reported a disappointing 2015 outlook across most key metrics, including revenues 6% below street (or 7-10% growth x-FX). However, management offered a strong response by expanding the number of seats on its board to 15 (which included selecting Icahn Capital executive Jonathan Chistodoro) and announcing its intention to cut 2,400 jobs in addition to selling / spinning its Enterprise business (formerly GSI Commerce and ~7% of revenues)."
The firm's FY15 rev est. drops 5% to $19.0bn (6% y/y), largely driven by a 9% reduction to Marketplaces ($8.6bn or -2% y/y). However, for EPS, guidance was lowered by $0.15, which reflects negative impacts of $0.10-0.15 from both f/x headwinds and separation dis-synergies, partially offset by a $0.10 benefit from a lower share count on the company’s increased buybacks. The firm's adj. EPS falls by 1.5% to $3.12, slightly above the midpoint of the guide. For 1Q15 specifically, revenue falls by 6% to $4.4bn (4% y/y), driven by lower Marketplaces ($2bn, or -6% y/y). The lower revenue flows through to a 5% reduction to EPS, now at $0.70, the midpoint of guidance.
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Shares of eBay closed at $53.38 yesterday.