S&P Global Ratings on May 28 affirmed eBay Inc.'s long-term issuer credit rating at BBB+ and maintained its stable outlook, citing the U.S. online retailer's leading e-commerce brand and its platform investments.

The agency said its rating reflects eBay's leading brand, unique inventory and high EBITDA margins above 30%, partly offset by its formidable competition, reliance on consumer spending, and limited EBITDA growth over the past five years.

Ratings expects the retailer's payments intermediation to reach meaningful scale in 2021 and 2022 and support good revenue and profit growth.

In September 2018, eBay began taking over payments management on its online marketplace in the U.S. from California-based PayPal Holdings Inc., which spun off from the company in 2015. PayPal will remain a payment option for eBay customers until July 2023 as part of the agreement the two companies signed in April 2018.

The agency added that the company's good brand and platform spending will enable it to deliver stable operating results over the next two years while managing its increasing shareholder returns.

In January, Ratings and Moody's also affirmed eBay's ratings, citing the company's initiatives to increase shareholder value, its geographically diversified customer mix, high brand awareness and its strong position in the e-commerce industry, among other reasons.

The rating agency said a downgrade is likely if eBay sustains leverage of more than 2x. This could occur if a macroeconomic downturn results in a sustained decline in consumer spending, or if the retailer faces increasing competitive pressure from Amazon.com Inc., niche e-commerce players, or the e-commerce platforms of traditional retailers.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.