FINWIRES · TerminalLIVE
FINWIRES

StubHub's Investment in Customer Acquisition Expected to Moderate in 2026, Morgan Stanley Says

By

-- StubHub's (STUB) investment in customer acquisition is expected to moderate in 2026, supporting guidance for an inflection to roughly 70% to 80% year-on-year adjusted earnings before interest, taxes, depreciation and amortization growth for the year, Morgan Stanley said in a Monday note.

As the company's marketing efforts moderate, StubHub can grow share and margins at a more gradual pace, supporting a three-year revenue and EBITDA compound annual growth rate of 7% and 13% from 2026 to 2029 as a base case, Morgan Stanley said.

The company now holds 45% of the North American resale market, Morgan Stanley said, adding that it continues to view the secondary market as competitive and assumes a more "cautious view of growth" beyond 2026, as several players could limit the company's margin growth and pressure take rates.

Morgan Stanley said that it saw meaningful upside potential to its and consensus estimates in 2026 driven by the FIFA World Cup and that the event implies about a 4% potential contribution to growth this year.

The bank initiated coverage on StubHub at equal-weight with a $8.25 price target.

Price: $7.24, Change: $+0.09, Percent Change: +1.26%

Related Articles

US Markets

United Airlines CEO Confirms Approach to American Regarding Potential Merger

United Airlines (UAL) Chief Executive Scott Kirby confirmed Monday that he approached fellow carrier American Airlines (AAL) about a possible merger, but the latter declined to engage and closed the door on a deal.A potential combination between the two companies could have expanded service to "smaller communities," increased the total number of economy seats in the marketplace, offered affordable prices to customers and built a more globally competitive US airline, Kirby said in a statement. The merger could have boosted the US economy and created "millions of jobs," among other benefits, Kirby added."I was hoping to pitch that story to American, but they declined to engage and instead responded by publicly closing the door," Kirby said. "Without a willing partner, something this big simply can't get done."American Airlines didn't immediately respond to' request for comment.American Airlines shares were down 2.7% in Monday afternoon trade, while United Airlines fell 1.4%.Earlier this month, American Airlines said it wasn't interested in any talks regarding a merger with United Airlines, adding that it would be "negative for competition and for consumers." Any deal would also have been "inconsistent" with the Trump administration's philosophy towards the industry and antitrust law, the company said at the time.During an earnings conference call with analysts last week, American Airlines CEO Robert Isom said a potential combination with United Airlines would have been "anticompetitive.""Everybody that has weighed in suggests the same thing," Isom told analysts, according to a FactSet transcript. "Bad for customers, bad for the industry, and then ultimately -- that'd be bad for American Airlines."American Airlines' public comments "make it clear that a merger like this is off the table for the foreseeable future," Kirby said Monday.US President Donald Trump reportedly voiced his opposition to the combination in a recent interview with CNBC, saying he didn't "like" having the two airlines merge.Last week, American Airlines reported that its first-quarter adjusted per-share loss narrowed year over year, while operating revenue increased. The carrier cut its 2026 earnings outlook at the time. Separately, United Airlines reported better-than-expected first-quarter results, but lowered its full-year earnings outlook amid rising fuel costs.Price: $91.69, Change: $-1.31, Percent Change: -1.41%

$AAL$UAL
Sectors

Sector Update: Health Care Stocks Softer in Afternoon Trading

Health care stocks were lower Monday afternoon with the NYSE Health Care Index easing 0.1% and the State Street Health Care Select Sector SPDR ETF (XLV) decreasing 0.2%.The iShares Biotechnology ETF (IBB) shed 0.2%.In corporate news, Eli Lilly (LLY) said Monday it has agreed to acquire Ajax Therapeutics for up to $2.3 billion in cash. The deal includes an upfront payment and subsequent payouts based on the achievement of clinical and regulatory milestones, the company said. Lilly shares were down 0.5%.Organon (OGN) shares jumped 17% after the company agreed to be acquired by India's Sun Pharmaceutical Industries $14 a share in cash, valuing the company at $11.75 billion.Moderna (MRNA) is facing a patent infringement lawsuit from CureVac, which alleged that Moderna's COVID-19 vaccine Spikevax used its proprietary mRNA technology without authorization, Reuters reported Saturday. Moderna shares were falling 3.3%.Catalyst Pharmaceuticals (CPRX) is being considered as a potential acquisition by Italy's Angelini Pharma, Bloomberg reported. Catalyst shares rose past 6%.

$CPRX$LLY$MRNA$OGN
Sectors

Sector Update: Consumer Stocks Decline Monday Afternoon

Consumer stocks were lower Monday afternoon, with the State Street Consumer Staples Select Sector SPDR ETF (XLP) decreasing 0.8% and the State Street Consumer Discretionary Select Sector SPDR ETF (XLY) shedding 0.3%.In corporate news, Domino's Pizza (DPZ) reported weaker-than-expected Q1 results on Monday, with the company's CEO saying consumer uncertainty and inflation weighed on demand late in the quarter. Its shares slumped past 9%.Verizon Communications (VZ) lifted its full-year earnings outlook on Monday and reported a Q1 bottom line above market estimates, while it unexpectedly added postpaid phone subscribers in the three-month period. Its shares rose 2.5%.Toyota Motor (TM) reported Monday total worldwide sales of 897,871 vehicles in March, down 7.3% from a year earlier. Toyota shares were fractionally higher.

$DPZ$TM$VZ