"Citigroup Inc. raised its target price for eBay Inc. (NASDAQ:EBAY) Thursday, from $28 to $31 with a Buy rating. Citigroup's Mark S. Mahaney wrote in a research note, ""$2.25B Revenue&Non-GAAP EPS of $0.40 came in ahead vs. Citi/Street at $2.18B/$2.18B and $0.37/$0.37. This was surprisingly stronger than the company's 9/21 statement that it expected Q3 results to come in at the high end of guidance. eBay also raised its Q4 guidance above the Street -- Midpoint Rev guidance of $2.44B vs. the Street at $2.40B and Midpoint EPS of $0.47 vs. the Street at $0.44."" He continued, ""We upgraded this stock in Q3 on 1) The potential for Marketplace Improvements - seems pretty clear from Q3 results; 2) The strength in eBay's Payments business - Q3 results only confirm a long established trend; and 3) A very reasonable valuation - 14X '11 P/E with a 7%+ FCF yield and cash at 18% of market cap,"" Mahaney continued. ""Other positives - a) EBAY bought back $300MM of stock in Q3 and authorized an additional $2B repo; and b) Short Interest (46MM shares) in EBAY is at the highest level in 4 years."" eBay has a potential upside of 5.2% based on a current price of $25.66 and an average consensus analyst price target of $27."

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