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Why Etsy Stock Is Rated a ‘Hold’ by a Majority of Analysts

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Rating synopsis

A majority of analysts tracking Etsy (ETSY) have maintained a “hold” rating on its stock. On January 24, 2018, 67.0% of the 12 analysts covering the stock recommended a “hold,” 25.0% recommended a “buy,” and 8.0% recommended a “sell.”

Since the company’s 3Q17 earnings release on November 6, 2017, several analysts have revised their target prices for Etsy. On November 7, 2017, Citigroup increased its target price to $17.50 from $15.00. RBC’s target price was raised to $18.00 from $16.00 projected earlier.

On December 21, 2017, KeyBanc initiated converge on Etsy with a “buy” rating and a target price of $26.00. On January 12, 2018, Morgan Stanley increased its price to $17.00 from $13.50 but slashed the rating to “sell.”

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Etsy’s turnaround

Etsy (ETSY) is a leading name in the online space for buying handmade and artisan goods. Etsy’s strength in this category has helped it stave off competition from Amazon, and the company’s turnaround efforts show promise.

As consumer preference shifts to online shopping, Etsy’s growth prospects look bright. However, Etsy remains a small player and with the major traditional retailers developing their digital platforms, the competition is getting tougher.

Currently, the analysts’ target price for the company is $18.52, which reflects a 2.8% downside to its stock price on January 24, 2018.

Where do Etsy’s peers stand?

Of the 29 analysts covering Shopify (SHOP), ~35.0% provided a “hold” rating. For eBay (EBAY), 46.0% of the 39 analysts covering the stock provided a “hold” rating. Plus, 48.0% of analysts provided a “hold” rating for Wayfair (W).

Currently, the analysts’ target price for Shopify is $115.70, reflecting a 3.3% downside to the stock price on January 24, 2018. eBay’s mean target price is $40.39, which indicates a 1.4% upside to the stock price on January 24, 2018. Wayfair’s target price is $83.55, implying an 8.0% downside to its stock price on January 24, 2018.

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