Macquarie Sees eBay Exploring M&A If It Can't Reaccelerate By 2019

Amazon.com, Inc. AMZN’s marketing strategy and overall sales continue to threaten other retailers, and eBay Inc EBAY is no exception, according to Macquarie. 

The Analyst

Macquarie analyst Benjamin Schachter maintained a Neutral rating on eBay and lowered the price target to $38.

The Thesis

Ebay does expect product improvements to ignite growth in the remainder of 2018, Schachter said in a Thursday note. (See the analyst's track record here.) 

Unless eBay produces a response to Amazon Prime, the analyst said he does not anticipate significant improvements for the online marketplace. 

Since eBay allegedly tends to ignore the presence of Amazon altogether, Schachter said he encourages the company to reverse course.

“We think AMZN is the issue. While there are many things that EBAY can do to try and improve its competitive positioning, we simply don’t see an answer to Prime. This is the issue that EBAY needs to address, in our opinion." 

Macquarie expects that eBay will focus on improving the buying and selling experience for users; ramping its advertising business; and transitioning its payments platform. 

 could not emphasize Amazon enough in Thursday’s note.

"We don’t expect that will significantly transform the business, and if it doesn’t, we would expect headlines at some point to discuss EBAY exploring its strategic options,” Schachter said.  

Price Action

Shares of eBay were trading up 0.79 percent at $34.38 at the time of publication Friday. 

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