eBay soars to its highest in 15 months on 'better than feared' earnings

eBayShannon Faulk/AP

  • eBay shares rose as much as 7% on Thursday after the company reported "better than feared" earnings results. That marked their highest level since April 2018.
  • The company also received price-target boosts from several Wall Street analysts.
  • Analysts said the company's improved forecast for 2019 and stock buybacks offset disappointing gross merchandise volume.
  • The company's declaration to review the value of its StubHub and Classified businesses also drew analyst praise, saying asset sales could help eBay focus on its core business.
  • Watch eBay trade live here.

Wall Street analysts issued largely positive statements about eBay's future on Thursday after the company reported second-quarter earnings that one analyst called "better than feared."

The e-commerce giant's shares climbed more than 7% on Thursday, hitting their highest level since April 2018.

EBay beat analyst estimates for both earnings per share and revenue when it announced its second-quarter figures after markets closed Wednesday. The company also raised its profit guidance for earnings from continuing operations for the rest of the year.

Analysts praised eBay's announcement that it would weigh the value of its StubHub and Classified businesses, with many seeing asset sales as a possible boost to future earnings.

The report prompted a number of investment banks to raise their price targets on eBay's stock. Deutsche Bank analyst Lloyd Walmsley called the company's improved forecast "conservative," but praised its growth in Promoted Listings and raised its price target to $46 from $42, according to Bloomberg.

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Analysts from both Bank of America and Morgan Stanley deemed the quarterly results "more of the same," and called on eBay to sell its Classified business in an effort to boost gross merchandise volume. Such a sale would help "return the market's focus to the ailing core," Morgan Stanley analyst Brian Nowak said in a research note.

Bank of America raised its eBay price target to $45 from $42 per share. Morgan Stanley raised its price target to $37 from $36.

Citi analyst Mark May called the results "better than feared," saying possible asset sales and an operational review could push the company's stock as high as $58 per share. The stock price is most likely rising because the company's miss on gross merchandise volume was balanced by stock buybacks, May added. Citi raised its price target for eBay to $48 from $40.

The online auction company has 15 "buy" ratings, 21 "hold" ratings, and 2 "sell" ratings, according to Bloomberg data. The stock was up 39% year-to-date through Thursday.

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