¢ StubHub trends as StubHub GMV comps are tough in 1H’17 (32% y/y growth in 1H’16). « Marketing expenses are expected to increase, putting pressure on margins and could raise concerns that GMV growth is being “bought”. Early 1Q traffic data points mixed comScore’s eBay desktop unique visitors decreased 6% on average through February vs. down 2% in 4Q. comScore’s total eBay mobile and PC minutes declined 20% y/y on average through February in 1Q vs. down 17% y/y in 4Q. comScore indicates mobile minutes decreased 38% vs. down 20% in 4Q. Estimates vs. Consensus: Expect modest EPS upside We expect eBay to report broadly in-line revenue/EPS estimates of $2.21bn/$0.49 vs. the Street at $2.21bn/S0.48 (guidance is $2.17bn-$2.21bn and $0.46-S0.48). Our model assumes 11mn shares repurchased in 1Q (about $350mn of repurchase activity). We have adjusted our GAAP EPS for higher amortization of deferred tax asset. Table 12: eBay Earnings Summary 1017 2Q17 2017 2018 Revenue BofAML est. $2,210 $2,340 $9,458 $10,062 Growth Y/Y% 3% 5% 5% 6% Street $2,206 $2,315 $9,398 $9,925 BofAML vs. Street Above Above Above Above EBITDA BofAML est. $855 $843 $3,520 $3,735 Street $841 $827 $3,494 $3,726 BofAML vs. Street Above Above Above Above EPS BofAML est. $0.49 $0.48 $2.03 $2.22 Street $0.48 $0.47 $2.01 $2.21 BofAML vs. Street Above Above Above Above Source: BofA Merrill Lynch Global Research estimates, Bloomberg, as of 4/4/2017 Our $38 price objective is based on 17x our 2018E non-GAAP EPS. O ur 17x P/E multiple is slightly ahead of the retail comp group average of about 16x, reflecting eBay's potential for a Marketplace growth acceleration (to well above average retail growth) in 2017. With 6-8% growth and an 8% FCF yield, we think eBay remains an interesting value stock for retail investors, although GARP focused Internet investors may prefer stronger growth at Google or Priceline. 18 Internet/e-Commerce | 06 April 2017 i rooriuliall HOUSE_OVERSIGHT_014904