Overview
Wells Fargo downgraded eBay Inc. (NASDAQ:EBAY) to Underweight from Equal Weight in a client note dated 3 August 2026, citing rising competitive pressure in the United States from fast‑fashion resale platform Vinted.
Analyst Estimate Revision
Ken Gawrelski of Wells Fargo reduced his fiscal‑2027 non‑GAAP earnings‑per‑share (EPS) forecast by 10%, positioning the estimate 9 % below the consensus view. The revision reflects anticipated dilution arising from eBay’s acquisition of Depop, which closed on 30 July 2026.
Competitive Landscape
Vinted entered the U.S. market with an aggressive marketing campaign that generated approximately 127 % of Depop’s U.S. advertising impressions in April 2026 and expanded its U.S. daily‑active‑user base to about 20 % of Depop’s total. In response, Depop is expected to increase its July marketing outlay to roughly three times Vinted’s elevated spend.
Strategic Rationale
Wells Fargo described the Depop acquisition as “strategically sound,” noting that eBay’s prior attempts to defend market share in the United Kingdom and Germany using the eBay brand had limited success. Depop’s younger user demographic, lower average selling price and discovery‑led platform are expected to provide a stronger defence against Vinted.
Earnings Guidance and Valuation
The firm projects that eBay’s third‑quarter 2026 EPS will trail consensus by 9 % and full‑year 2026 EPS by 6 % after accounting for Depop‑related dilution, while still anticipating an upward revision to the gross merchandise value (GMV) outlook. Consequently, the price target was cut to $92 from $105, based on a multiple of 20 × fiscal‑2027 GAAP EPS.
Risks
Wells Fargo identified two explicit risk factors: an outstanding bid by GameStop for eBay, which could serve as an upside catalyst, and a possible reduction in Depop’s commission rate, which would act as a downside pressure on earnings estimates.