Wells Fargo Lowers eBay Target as Vinted’s U.S. Push and Depop Costs Tighten Earnings

eBay shares slid 4 % on Monday after Wells Fargo moved the stock from an Equal‑Weight to an Under‑Weight rating, citing a surge in U.S. competition that could dent the company’s earnings outlook.

The brokerage highlighted Vinted’s aggressive advertising campaign as a key threat. In April, Vinted’s U.S. ad impressions surpassed Depop’s by roughly 127 %, and the spend helped lift Vinted’s U.S. daily active users to about 20 % of Depop’s user base.

Depop, which eBay acquired, has responded by tripling its July marketing spend to outpace Vinted’s already‑elevated levels. Wells Fargo still views the acquisition as strategically sound, noting that eBay has struggled to compete against Vinted in markets such as the U.K. and Germany.

Depop offers a younger demographic, lower average selling prices and a discovery‑focused shopping experience, factors Wells Fargo believes could give eBay a stronger competitive edge.

However, the bank warns that the near‑term earnings impact will be significant. It projects eBay’s Q3 and full‑year 2026 guidance to fall 9 % and 6 % below consensus, respectively, largely due to dilution from the Depop deal. Despite this, Wells Fargo expects eBay to lift its gross merchandise value forecast, indicating that sales volume should remain robust even as marketing spend erodes short‑term profits.

The 6 % dip in eBay’s stock price reflects investors’ focus on immediate profit pressure rather than the long‑term benefits of the Depop acquisition. The consensus is not that the purchase was a mistake, but that defending it against Vinted will cost real money and squeeze earnings in the near term.

Wells Fargo’s new price target of $92 underscores the belief that earnings will feel the pressure before any competitive advantage from Depop fully materialises.