What Happened?
Shares of online marketplace Etsy (NASDAQ:ETSY) jumped 3.1% in the pre-market session after the company received positive attention from Wall Street analysts, including an upgrade from Morgan Stanley and a price target increase from UBS.
Morgan Stanley upgraded the online marketplace's stock to "Equalweight" from "Underweight" and raised its price target to $50 from $38. The firm noted that while it maintains long-term caution, it sees a more balanced risk-to-reward profile in the near term. Adding to the positive sentiment, UBS boosted its price target on Etsy to $62 from $45, citing an improved outlook for fiscal year 2025. The bank's analysts pointed to an acceleration in monthly active users for the Etsy app and a pickup in U.S. sales as reasons for their increased estimates. These analyst actions suggest growing confidence in Etsy's ability to stabilize its Gross Merchandise Sales (GMS) growth, which is a key metric representing the total value of goods sold on the platform.
After the initial pop the shares cooled down to $59.28, down 0.6% from previous close.
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What Is The Market Telling Us
Etsy’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 3.1% as the company's latest 13F filing revealed a significant increase in ownership by an institutional investor.
Cerity Partners LLC boosted its stake in the specialty e-commerce retailer by over 211%, purchasing an additional 64,279 shares during the first quarter, according to a filing with the Securities and Exchange Commission made public today.
This purchase brought the firm's total holdings to 94,691 shares, valued at approximately $4.47 million. Such a substantial increase in a position by an institutional investor was seen as a vote of confidence in the company's future prospects, despite recent headwinds from a competitive e-commerce landscape and pressures on consumer discretionary spending., The move came even as analysts held a mixed "Hold" consensus rating on the stock.
Etsy is up 11.6% since the beginning of the year, and at $59.28 per share, it is trading close to its 52-week high of $65.14 from July 2024. Investors who bought $1,000 worth of Etsy’s shares 5 years ago would now be looking at an investment worth $566.41.
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