Why the Rest of 2018 May Reward Etsy Shareholders Even More

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Etsy Inc. (NASDAQ: ETSY) was featured heavily in Wednesday’s top analyst upgrades and downgrades, which is produced daily. Most analyst calls are calling for 8% to 10% with new Buy ratings in established companies at this stage of the market, and other companies are often seen as having 15% upside in reiterated and maintained calls. This Etsy call was a much stronger one than that, but not so much out of line that it seemed completely unreasonable, or only considering upside without any downside.

Etsy was started with a Buy rating at BTIG on Wednesday morning, and the firm assigned a $59 price target. BTIG’s Marvin Fong sees Etsy’s business model basically baptized similar to Amazon with lower risk to its growth opportunities. This almost felt like the report could have been called a “stocking stuffer” for the coming holidays.

An additional driver here was the 32 million built-in base of online consumers who have been buyers already, as well as Etsy’s promoted listings and the international opportunity.

While the valuation implied about 25% upside from Tuesday’s closing price, this price target actually would mark a new 52-week high. It was also several dollars above the consensus analyst price target from Thompson Reuters of $53.20.

Etsy shares have not been given endless amounts of coverage by analysts through October and November. Here are four of the more recent analyst calls that have been made:

  • On November 7, RBC maintained a Sector Perform rating but raised its target to $52 from $45. On the same day, Loop Capital maintained a Buy rating but lowered its target to $57 from $65.
  • On October 24, Morgan Stanley raised Etsy to Equal Weight from Underweight and raised its target to $48 from $36.
  • And on October 2, KeyBanc Capital Markets maintained its Overweight rating and raised the target to $59 from $51.

Etsy closed down 6.6% at $47.35 a share on Tuesday, and its 52-week trading range is $16.13 to $55.71.

As a reminder, Etsy shares were already up well over 100% so far in 2018, even after the pullback that has been seen.