eBay downgraded to "sell"

19.10.07 - Deutsche Securities

NEW YORK, October 19 (newratings.com) - Analyst Jeetil Patel of Deutsche Bank Securities downgrades eBay (EBAY) from "hold" to "sell," while raising his estimates for the company. The target price is set to $33.

In a research note published yesterday, the analyst mentions that the company has posted it 3Q EPS, adjusted for foreign exchange gains and a lower tax rate, in-line with the estimates. eBay has posted a rise in ad costs, a decline in purchase frequency, accelerating seller costs and operating margin expansion, the analyst says. The company generated a 2% rise in transaction volumes in the quarter, which may decline over the next couple of quarters, Deutsche Bank Securities adds. The EPS estimates for FY07 and FY08 have been raised from $1.36 to $1.49 and from $1.54 to $1.55, respectively.