NEW YORK (AP) — Shares of eBay Inc. rose to their highest price in more than six years on Monday, after a Keefe, Bruyette & Woods analyst initiated coverage of the company with an "Outperform" rating, saying that it's "uniquely positioned" to benefit from the continued global shift toward e-commerce.
THE SPARK: Analyst Sanjay Sakhrani also set a $50 price target for San Jose, Calif.-based eBay, pointing to the attractive value of the e-commerce and online payment company's shares, its continued overseas growth and its ability to pick up market share.
THE BIG PICTURE: EBay draws about 57 percent of its revenue from its marketplace businesses, which includes its namesake website, 38 percent from its payment processing business PayPal, and the rest from its marketing and e-commerce division, Sakhrani said.
The company said it expects PayPal's growth to continue to pick up over the next few years and eventually pass that of the marketplaces business, Sakhrani said.
In April, eBay said its first-quarter net income jumped 20 percent thanks to higher revenue from its PayPal business and brisk sales at its e-commerce websites. Revenue soared 29 percent and the results beat Wall Street's expectations.
THE ANALYSIS: "There is a consensus brewing that the next decade or so will see the proliferation of electronic commerce, largely aided by the increased prominence of the smartphone globally," Sakhrani wrote in a note to investors.
"We believe eBay is uniquely positioned to benefit from and capitalize on the convergence of commerce, payments, and marketing by offering a one-stop-shop solution for merchants through a combination of its three business segments."
THE SHARES: Up $1.97, or 4.8 percent, to $42.64 in afternoon trading after peaking at $42.69 earlier in the day and passing its previous 52-week high of $41.96. The jump marked the company's highest stock price since January 2006.