eBay Falls as Analyst Cuts Target

eBay, Inc. (Nasdaq: EBAY) fell 6 to 32 5/16Tuesday after Dain Rauscher Wessels analyst George Sutton reportedlyslashed his price target for the stock to US$50 from $115.

Reports said Sutton changed his view of the online auctioneer to reflect thecurrent market environment.

eBay, however, is enjoying a surge in visitors this holiday season. A report from MediaMetrix found that in the two weeks ended November 26th and December 3rd,the site averaged 60 percent more unique daily visitors than Amazon.com, theInternet’s top retail site.

Daily visits to online auction sites overall were running 62 percent aheadof the same period last year, with eBay seeing an 89 percent increase, thereport showed. “There’s the popular notion that Amazon is the king of onlineshopping destinations, but there’s another shopping destination that isdrawing critical mass: eBay,” Media Metrix researcher Max Kalehoff told theE-Commerce Times.

Yet eBay shares have not fared well in recent months, as technology ande-commerce issues in general have languished. eBay shares set a 52-week lowlast month, falling to 29 1/4 on November 22nd. Six months earlier, the stockhad traded as high as 127 1/2.

In October, the auction giant reported strongresults for the third quarter, earning $19.1 million, or 7 cents pershare, as revenue rose 98 percent from a year earlier.

Chief executive officer Meg Whitman has predicted the company will seerevenue of US$3 billion by 2005, which would mean a growth rate of 50 percentper year. Lehman Brothers analyst Holly Becker, in a research note last month,called that target “aggressive” and said it raises a “red flag” as far asthe stock is concerned.

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