J.P. Morgan analyst Bryan Smilek maintained a Hold rating on Etsy (ETSY – Research Report) today and set a price target of $50.00.
Bryan Smilek has given his Hold rating due to a combination of factors impacting Etsy’s market position. Despite Etsy’s limited direct exposure to tariffs from Canada, Mexico, and China, the potential for broader European tariffs poses a significant risk to its Gross Merchandise Sales (GMS). This could lead to increased costs for sellers, which may be passed on to consumers, potentially affecting demand.
Additionally, while Etsy has a strong marketplace with a significant number of active buyers and sellers, macroeconomic headwinds in discretionary spending could limit long-term growth trends. Although Etsy maintains solid adjusted EBITDA margins and free cash flow conversion, these growth challenges and necessary investments are likely to weigh on short-term profitability. The price target of $50 reflects these considerations, with Etsy trading at a discount compared to its e-commerce peers due to lower projected revenue and profitability growth.
In another report released on March 24, Bernstein also maintained a Hold rating on the stock with a $50.00 price target.