eBay rebounds after multiple analysts defend the stock

March 14, 2013

MasterCard (MA) yesterday announced that it would charge eBay's (EBAY) PayPal a fee in many of the instances that MasterCard is used to fund a PayPal transaction, according to Piper Jaffray analyst Gene Munster. MasterCard will begin collecting the fee in June, the analyst stated. But eBay had previously warned in an SEC filing last month that MasterCard was poised to levy such a fee starting in June. The fee has already been reflected in eBay's 2013 guidance, Munster wrote. Moreover, any further changes that credit card networks make in their relationship with PayPal will be immaterial, Munster believes. He maintained a $63 price target and Overweight rating on the shares. Meanwhile, JPMorgan analyst Doug Anmuth wrote that yesterday's decline in eBay's stock was overdone. Anmuth estimated that MasterCard would increase its fees on PayPal transactions by 0.1 percentage points. Such a change would only lower eBay's operating income by 0.3 percentage points, he believes. Even if all credit card networks adopted similar increases, eBay's operating income would only fall by 2% as a result, Anmuth added. He maintained a $56 price target and Overweight rating on the stock. Also this morning, Evercore raised its rating on eBay to Overweight from Equal Weight, while Argus said the sell-off in its shares creates an attractive entry point for investors. In late-morning trading, eBay jumped $1.50, or 2.94%, to $52.48.