EBay is called attractive by Argus at its current valuation
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Argus lowered estimates on eBay (NASDAQ:EBAY) with factors such as inflationary pressures, supply chain challenges, and the macroeconomic impact of the war in Ukraine seen cutting into profitability.
The firm now forecasts 2022 EPS of $4.07 for eBay (EBAY) vs. $4.40 prior and 2023 EPS of $4.53 vs. $4.75 prior.
Analyst Joseph Bonner: "While the company continues to reinvent itself through its Marketplace strategy and the addition of new advertising and fintech revenue streams, we expect 2022 to be a particularly rocky year for eBay as inflation, higher interest rates, supply-chain shortages, and higher energy prices weigh on consumer confidence and e-commerce spending. Of course, a full-blown recession could further deepen the trough."
Looking further ahead, Bonner noted that eBay (EBAY) has reiterated guidance for 2023 and 2024 on confidence that the headwinds will fade.
Argus keeps a Buy rating on EBAY with valuation called attractive in relation to peers. EBAY shares are noted to trade at an EV/EBITDA ratio of 9.0X vs. the five-year average of 12.8X. the firm has a price target of $69.
Shares of eBay (EBAY) rose 0.97% premarket to $46.61 vs. the 52-week trading range of $45.19 to $81.19.
See all the valuation metrics on eBay.