Barclays sees a strong fourth quarter ahead for e-commerce. In a note out today analyst Anthony DiClemente raised his estimates and price targets for Google (GOOG) and eBay (EBAY).
He writes that during the long weekend, from Thanksgiving through Cyber Monday, Mercent saw growth in Google-sourced transactions up as much as 63% year-over-year. �This is significant as many of these transactions are sourced through Google Shopping and its Product Listing Ads (PLAs), which has become an entirely paid channel this year, whereas many Google-sourced transactions Mercent previously saw came through free channels.� Mercent believes that Google is aggressively promoting its shopping platform, which has resulted in some sites shifting toward Google.
DiClemente notes that the Mercent data also show that mobile devices are becoming an ever-larger part of the shopping equation; excluding Amazon (AMZN) and eBay, mobile transactions were 16% of total purchases, �up meaningfully year over year.� Mercent sees apps as the driver of much of this growth, which largely benefit individual retailers, like eBay, for example.
As for Amazon, DiClemente says it remains stable, posting consistently strong growth in the high 30% range, and it has maintained its meaningful price advantage even in states that now require it to collect sales tax.
Here are his increased estimates for Google and eBay: �In light of commentary around strong growth at GOOG, we believe GOOG stands to benefit from the conversion of Google Shopping to a paid channel in 4Q and raise our PT to $800 on ~17.5x our new 2013E PF EPS of $46.35 (vs ~17x $45.84 previously.) Similarly, we believe EBAY is benefitting from strong e-commerce momentum, as ChannelAdvisor data shows accelerating sales growth at EBAY and Mercent noted ~20% growth during the Cyber 5. We are raising our EBAY PT to $55 on ~20x our 2013E EPS of $2.72 (vs ~18x $2.69 previously).�
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