A soft European economy and strong U.S. dollar led Aegis Capital Wednesday to lower its full-year 2019 revenue estimates for eBay Inc. EBAY.
The Analyst
Aegis analyst Victor Anthony maintained a Buy rating on eBay and lowered the price target to $40 from $44.
The Thesis
The auction site is likely to suffer from expected lower overall merchandise sales volume because of economic softness in Europe and a strong U.S. dollar, Anthony said in a Wednesday note.
The strengthening of the dollar has a negative impact on exports, and eBay has a good-sized cross-border business, the analyst said.
The risk factors cited by Anthony include:
- More competition from other e-commerce companies, particularly Amazon.com, Inc. AMZN
- The uncertain prospects surrounding the potential for additional future government regulations.
- The possibility of higher postal rates.
- Overall macro issues affecting the broader stock market, including trade wars, interest rates and energy prices.
Price Action
Shares of eBay were 2.78 percent higher at $28.85 at the close Wednesday.
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