Analyst Note
| Sean Dunlop |Narrow-moat eBay's business looks a lot different than it did two years ago following the divestitures of Stubhub, eBay Classifieds, and the pending sale of the firm's South Korean marketplace business. All told, we anticipate that eBay will recognize approximately $14.8 billion in after-tax gains on sale during 2021, which led the firm to increase its 2021 share repurchase facility to $5 billion, from $2 billion previously. We view this as a prudent use of capital, with no apparent need for incremental internal investments or acquisitions, and now forecast $9.3 billion in share repurchases through 2023. After making adjustments for time value of money and sales leverage over fixed costs like depreciation and amortization, sales and marketing expenditures, and administrative overhead, we're raising our fair value estimate to $66 from $58 prior, leaving shares fully valued. Further, contemplating relative stability in the marketplace business, we're lowering our uncertainty rating to medium from high.