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Morgan Stanley Flips From EBay’s Biggest Bear to Top Bull on AI

(Bloomberg) -- EBay Inc.’s embrace of artificial intelligence has turned the stock’s most bearish analyst into its biggest fan, with Morgan Stanley seeing a further 25% gain for the shares over the next year.

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“We believe eBay is best-positioned to capture upside from generative AI in 2024,” the bank’s analyst Nathan Feather wrote in a note, double-upgrading the stock to overweight. Feather’s new price target of $62, up from a previous $35, makes him the most bullish analyst on the Street, according to data compiled by Bloomberg.

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Ebay shares are up 13% this year on hopes job cuts can revive profits against a tricky economic backdrop. Morgan Stanley is positive on the company’s “strategy evolution” following a boost during the pandemic-era lockdowns, and sees eBay’s focus on AI features driving growth.

Feather assumed coverage of eBay as Morgan Stanley’s lead analyst in February with an underweight rating. He recommends a pair trade with peer Etsy Inc. as the valuation gap between the two narrows. Ebay’s shares rose 3.5% in US premarket trading following the upgrade, while Etsy dropped 3.7% as Morgan Stanley cut the stock to underweight.

--With assistance from James Cone and Subrat Patnaik.

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