Marilyn Monroe said, “Happiness is not in money, but in shopping.”
Now that Black Friday is behind us, let’s review some happy shopping news. Yesterday was Cyber Monday, the day of online sales and deals, and the day when shoppers, unencumbered by the need to show up at a crowded store, can pick up some deals at lunch on their day back at work after the holiday weekend.
Online retail has become a giant in its own right. According to Adobe’s tracking of major US online retailers, this year’s Cyber Monday sales reached $7.9 billion in total volume, shattering last year’s record of $6.59 billion with a near-20% increase. Even more important, from the perspective of the retailers: more than $2 billion of that total – almost one third of the volume – was conducted via smartphone. Online retail isn’t just growing; it’s also changing its own industry, in real time.
Let’s use TipRanks’ database to unpack some numbers on a few of the big players in the online retail ecosystem, and see how they fared over this first weekend of holiday shopping.
eBay, Inc. (EBAY – Research Report)
eBay, a survivor of the 90’s dot.com bubble, is the second largest player in the US online selling game – only Amazon.com (AMZN) is bigger. Last year, eBay generated over $9.5 billion in revenue through its fee-for-service model.
As a major player in online retail, eBay was well positioned to profit from Cyber Monday, and the stock price reflects that. EBAY share prices gained 1.27% yesterday, marking the fourth straight trading day of gains. The stock’s current share price is $28, and the average price target of $37 yields a 30% upside potential. The analyst consensus is a ‘Moderate Buy,’ based on an even split: 12 ‘buy’ ratings, 12 ‘hold’ ratings, and one ‘sell.’
Market analysts give similarly split reviews of eBay, but anticipate a strong holiday season. Baird’s Colin Sebastian (Track Record & Ratings) gives a typical statement, saying, “[G]iven management’s updated strategic priorities and more cautious tone around marketplace growth, he anticipates growth trends will remain subdued. I expect Black Friday/Cyber Week promotions will drive a seasonal uplift in volume.” His $41 price target reflects his holiday season optimism with a 41% upside. Given the Cyber Monday totals, that optimism may be well-placed.
Etsy, Inc. (ETSY – Research Report)
Etsy offers yet another model of online selling, different from both Amazon and eBay. Think of it as an online consignment shop – the platform offers sellers an online space to make their wares available, complete with the ability to show photos, message with customers, and process payments.
Like eBay, Etsy saw a share price boost coincide with the record-breaking shopping weekend. Etsy’s gain was stronger, at 6.5% on Monday with over 2 million shares traded. The strong trading day followed more modest gains in the two previous trading sessions.
Marvin Fong (Track Record & Ratings) of BTIG sets a $59 target and writes, “Investors are underestimating the upside potential of a Etsy’s estimated 32M dormant buyers and is bullish on the company’s Promoted Listings and International opportunity.” Meanwhile, writing from Loop Capital, Laura Champine (Track Record & Ratings) anticipates “the company’s improvements to the buyer experience and marketing investments.” Her price target of $57 is an 18% upside.
Etsy’s current share price is $48, and the average price target is $54. The 12% upside potential is modest, reflecting the ‘Moderate Buy’ analyst consensus.
Target Corporation (TGT – Research Report)
Our last stock is the fifth largest US online retailer, and a giant brick and mortar player. Target operates 1,822 big-box department stores in the US, and is second in retailer size only to Walmart. The company’s stock took a heavy hit with the general market downturn last week, but stopped falling at the start of the holiday shopping season. TGT shares gained 2.8% on Cyber Monday.
Key Banc’s Edward Yruma (Track Record & Ratings) lays out the bullish case for Target stock. Acknowledging weakness in the retail sector, he cites an active management and says, “Target is committed to stabilizing any further declines through in-store productivity improvements and merchandising initiatives. While this could prove to be a challenging task, it is overshadowed by the stock’s compelling valuation of just 12.1 times 2019 estimated P/E.” His price target is $110, an aggressive 59% over current levels.
Target’s share price now stands at $69, and the $85 average price shows a 24% upside potential. With 5 ‘buy’ ratings, 7 ‘holds,’ and one ‘sell,’ TGT’s analyst consensus is a ‘Moderate Buy.’ The company’s strengths include a loyal customer base and $36 billion in market cap.
Enjoy Research Reports on the Stocks in this Article:
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