eBay downgraded to ‘Sell’ at Goldman Sachs on consumer weakness
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Inflation and a weakening consumer overall is a cause for caution on eCommerce stocks, according to Goldman Sachs.

In a wide-reaching deep dive, the New York-based investment bank noted that a greater probability of a weaker macro environment and solidly lower revenue growth from many internet stocks skews risks to the downside. This is particularly so for names reliant upon consumer spending and pandemic-related tailwinds like eBay (NASDAQ:EBAY).

âWith the global consumer environment under pressure and eCommerce growth slowing in a post-pandemic world, we see eBayâs forward GMV and revenue growth at risk, especially given its overexposure to international markets,â a team of Goldman analysts led by Eric Sheridan wrote. âAs a result, and measured against the companyâs current valuation, we are incrementally more cautious on the companyâs share performance going forward.â

Sheridan added that a need for increased spending on planned growth initiatives adds to apprehension on the ability of the company to save on costs. At the very least, he indicated these spending programs will provoke near-term choppiness.

âWe are incrementally more cautious on the companyâs share performance going forward, particularly when measured against the companyâs current valuation,â the team concluded.

As a result, the team downgraded the stock from âNeutralâ to âSellâ and cut their price target from $52 to $42. Shares fell over 3% in pre-market trading, inching closer toward the bankâs new price target.
Read more on the growth plans presented by eBay (EBAY) during its most recent earnings presentation.