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Shares of eBay (EBAY) inched lower on Aug. 3 after Wells Fargo’s senior analyst Ken Gawrelski downgraded the e-commerce giant to “Underweight.” In his research note, Gawrelski also lowered his price target on EBAY to $92, indicating potential downside of roughly 5% from current levels.
That said, eBay stock has been a lucrative investment in 2026, currently up nearly 35% versus its year-to-date low in mid-February.
Why Is Wells Fargo Bearish on eBay Stock?
Ken Gawrelski’s bearish call on EBAY shares is based primarily on “intensifying competition” in fashion and apparel resale.
According to Gawrelski, while the firm’s recent acquisition of Depop was “strategically sound,” it could hurt profitability in the near term, given European rival Vinted has initiated an aggressive promotional push across the U.S.
In April, Vinted reached about 127% of Depop’s U.S. ad impressions, rapidly accelerating its daily average user (DAU) base to one-fifth of the eBay subsidiary.
To defend its market share among Gen Z shoppers, Depop counter-escalated its own marketing outlays, with spending now estimated at 3x higher than Vinted’s elevated spend.
In short, the Wells Fargo analyst expects this promotional war to trigger heavy cash burn, limiting any further upside for the Nasdaq-listed firm.
What to Expect From eBay Earnings This Week?
Due to increased customer acquisition costs, Gawrelski also trimmed his 2027 earnings per share (EPS) forecast for eBay by 10%, placing it meaningfully below the Wall Street consensus.
In the third quarter, he expects Depop’s marketing spend to shave about $0.15 off EPS, and expects management to issue disappointing guidance on Aug. 5, reflecting notable margin compression.
That said, consensus is for eBay to record $1.20 in earnings per share for its fiscal Q2, which would still represent a more than 12% year-over-year increase.
Note that eBay shares also currently pay a dividend yield of 1.16%, making them attractive as a long-term holding.
What’s the Consensus Rating on EBAY Shares?
Crucially, other Wall Street analysts seem to disagree with Gawrelski on EBAY stock.
The consensus rating on eBay remains at “Moderate Buy,” with price targets as high as $135 indicating potential upside of more than 25% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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