Piper Sandler is getting more bullish on shares of Etsy , predicting strong growth tailwinds for the stock in the months ahead. Analyst Edward Yruma upgraded shares of the online marketplace and e-commerce company to overweight from neutral, saying in a Tuesday note to clients that recent survey work reaffirms the view that Etsy’s “key marketplace strengths will help reaccelerate active buyer growth” and drive share gains over the medium term. The stock rose about 3.4% before the bell. Year to date, shares are down 9.6% after tumbling 45% in 2022. ETSY YTD mountain Etsy shares in 2023 Yruma highlighted Etsy’s momentum among younger generations, given its focus on values like sustainability and successful reactivation of some lapsed buyers — which hit a record 24 million last year — as additional pockets of strength for the company. “While macro remains choppy, ETSY’s 28% [last 12 month] EBITDA margin and L-T growth opportunities make this one of the highest quality names in our coverage,” he wrote. The analyst also views shares as inexpensive, noting that they trade close to trough valuation and significantly below the company’s four-year enterprise value-to-EBITDA ratio average. Yruma upped his price target on shares to $140 from $135, implying about 29% upside from Monday’s close. “While we acknowledge that macro conditions remain pressured and consumer spending may be tipping to the downside, we believe ETSY has growth company characteristics at a GARP valuation,” he said. — CNBC’s Michael Bloom contributed reporting
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