The shares of eBay (EBAY) are falling after Morgan Stanley downgraded the stock to Underweight, the firm's equivalent of sell, citing "emerging weakness" in the company's overseas business.

WHAT'S NEW: Although investors are well aware of eBay's problems in the U.S., they are less cognizant of looming troubles the company is facing abroad, where it now obtains 64% of its revenue, warned Morgan Stanley analyst Brian Nowak. Morgan Stanley's survey data shows that eBay's popularity has dropped considerably in the U.K. and Germany, Nowak reported. Specifically, the survey showed that over 60% of consumers in the two countries don't plan to shop on eBay in 2016, versus approximately 20% who made the same prediction at the beginning of 2015, the analyst wrote.

Meanwhile, 95% of British consumers who plan to shop on eBay in 2016 and 98% of Germans who intend to shop on the website this year expect to spend the same or less money on its site this year compared with 2015, Nowak reported.

Additionally, Amazon's (AMZN) Prime service is getting more popular in Europe, eating into eBay's market share there, according to the analyst. Specifically, the number of Prime members increased 47% in the U.K. and 40% in Germany over the last year, and Amazon has said that its overseas Prime subscriber base jumped 50% in each of the last two years, noted Nowak, who set a $22.50 price target on eBay shares.

PRICE ACTION: In late morning trading, eBay fell 2.8% to $24.59 per share.