Axiom analysts have upgraded eBay stock to a Buy from hold before PayPal spinoff, as they believe that the spinoff can escalate the value of the stock in the coming period.
Axiom analysts have upgraded the stock of eBay Inc. to buy from previous Hold rating with $70 stock price target ahead of its PayPal spinoff. During the year, the stock price of eBay has stayed in the range of $55 to $60 mainly due to growth rate issues at eBay; together with pressure on its payment unit PayPal analysts are of the view that additional spinoffs and the asset sales can lead the stock value in the upcoming quarters.
As per analysts at Axiom, the performance of the company will get stable by the next quarter of current fiscal year because of easier comps. EBay’s gross merchandise volume growth rates have not performed up to the standard of e-commerce industry because of rising effects from search engine optimizers and data breach. Moreover, the sustained adverse impact from the strengthening dollar has damaged its global trade with a decrease in the average selling price.
Axiom analysts believe that the growth in marketplace will escalate in the coming quarters as the international technology company is most likely to overcome the negative impact of the cyber-attack from last spring.
The company is looking for $100 billion worth of valuation in the United States alone and has also declared that it will examine the services of Amazon Prime in Germany, which will be moved out to several markets.
Moreover, the company has also declared that it will discover the sell-off idea or an initial public offering of its business. Axiom analysts believes that the company’s enterprise business worth more than $1 billion. EBay functions various classified sites that generates more than 41 billion in yearly revenues.
The payment system of eBay has shown a substantial growth in the last three years, averaging at roughly 20%. Axiom analysts were worried regarding threats from companies like Apple Inc. Though they are optimistic that its payment system, PayPal will endure to expand and grow its free cash flows and margins.
Axiom, in its research note mentioned various risk factors. Analysts are of the view that the rising competition from companies like Alibaba, Google and Amazon can impact the stock of the company.
Out of 29 analysts covering the stock of Amazon, 22 gave Buy rating, 23 gave Hold, while four of them assigned sell rating to the stock. The twelve month mean target price stands at $62.30.
EBay stock has increased roughly by 4% in 2015. The stock was down 1.67% to $58.67 at market close on Tuesday.