NEW YORK - EBay Inc shares rose on Tuesday after Piper Jaffray upgraded the stock of the online auctioneer, citing improved Web traffic and improved customer satisfaction with its website.
The shares rose 4.3 percent to $24.84 in premarket trading.
We are upgrading shares of eBay to overweight from underweight based on our quarterly eCommerce survey which suggests recent changes made to the eBay marketplace could have a longer term impact on stabilizing the business, wrote Piper Jaffray analyst Gene Munster.
Also, Web traffic data suggests slight upside to the September quarter.
Munster, who raised his price target on the stock to $30 from $19, said the number of unique users to eBay's U.S. site is showing consistent signs of improvement, increasing 12 percent in August compared with the same month a year ago.
Munster also said Piper Jaffray's most recent quarterly survey of 300 online shoppers showed 79 percent were satisfied or very satisfied with eBay, up from 70 percent in the previous two surveys.
We believe customer satisfaction is a leading indicator of future sales because it leads to repeat sales, lower marketing spend, and better margins, Munster wrote in the note. (Reporting by Nicole Maestri; editing by John Wallace)