eBay “sector perform,” target price reduced - update

07/15/08 - RBC Capital Markets

NEW YORK, July 15 (newratings.com) – Analysts at RBC Capital Markets maintain their "sector perform" rating on eBay Inc (EBAY). The target price has been reduced from $40 to $35.

In a research note published this morning, the analysts mention that the conversion/ASP study indicates that despite the worsening m/m trends, the company might report marginal acceleration in GMV in the US in 2Q08. The analysts add, however, that the take rates might decline over the forthcoming two-to-three quarters on account of deals with large e-tailers, including Buy.com, at less favourable economics than that of the ones with traditional PowerSellers. The downward revision in the target price reflects the continued transition of the company’s platform and low visibility into the core marketplaces platform, RBC Capital Markets adds.