Keefe, Bruyette & Woods Is Not Entirely Surprised By eBay Inc Separation Announcement

In a report published Tuesday, Keefe, Bruyette & Woods analyst Sanjay Sakhrani reiterated an Outperform rating and $65.00 price target on eBay Inc (NASDAQ: EBAY).

In the report, Keefe, Bruyette & Woods noted, “We are not entirely surprised by the separation announcement given investor activism coupled with a challenging operating environment and heightened perceived competitive threats (e.g. Apple Pay). While there are clearly a number of unknowns related to the separation, we think an important component will be the standalone profitability of PayPal, excluding the investment initiatives being made within the payments segment to build on the company's omni-channel strategy. This strategy included investments made to develop the company's off-line presence, which have seen limited traction. Also, we think a separately traded PayPal might have better success in securing a higher multiple than what is implied in the current total enterprise valuation. Finally, we believe a separate PayPal might more easily be acquired as well.”

eBay Inc closed on Monday at $52.66.