Ebay shares set to open lower after weak forecast, price target cuts Jul 18th 2013, 13:26
Reuters –
(Reuters) - Shares in eBay Inc were set to open around 7 percent lower and at least six analysts trimmed their price targets, after a slowdown in international markets prompted a warning from the online auctioneer about its outlook.
Ebay said on Wednesday it expected full-year results to be at the low end of the company's forecast range, due to headwinds in the second half of the year from Europe and South Korea.
Expected U.S. demand may not be enough to offset international weakness, brokerage Needham & Co said as it downgraded the stock to "hold" from "buy."
Ebay chief executive John Donahoe said Europe's weak economy had affected e-commerce. In South Korea, e-commerce growth slowed to about 4 percent this year from 9 or 10 percent last year, he added.
At least six brokerages cut their price targets for eBay stock by $1 to $3 to between $60 and $64, citing weakness in international markets.
"While the US market appears stable, our expectations for domestic demand are not strong enough to offset the international slowdown and deliver second-half upside," Needham lead analyst Kerry Rice wrote in a note.
Rice did not expect eBay's investments in new products, consumer awareness and supplier relationships to change the company's momentum.
Core gross merchandise volumes rose 13 percent from a year earlier but were flat from the previous quarter, Rice said.
JP Morgan analyst Doug Anmuth trimmed his price target to $60 from $63 but maintained a rating of "overweight", saying he was encouraged by accelerating growth in eBay's payments and marketplaces business.
Ebay Mobile attracted 2 million new users in the second quarter and would be a strong driver of growth as new users became more engaged, Anmuth wrote in a note.
(Reporting by Siddharth Cavale in Bangalore; Editing by Rodney Joyce)
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