Investing.com -- Jefferies upgraded Etsy Inc (NASDAQ:ETSY) to "Hold" from "Underperform," raising its price target to $55 from $45, given improving fundamentals and a trough valuation that balances risks and rewards.
“We believe ETSY's trough multiple signifies low expectations, which should help reduce downside risk for the stock and create a more attractive risk-reward,” analyst wrote.
The firm highlighted easing buyer churn, easy year-over-year comparisons, and efforts to boost spending as key drivers of gross merchandise sales recovery. Jefferies expects merchandise sales growth to accelerate through 2025, supported by stabilizing buyer behaviour and improved spending frequency.
Etsy’s marketing investments, particularly in social channels, have pressured margins but are expected to stabilize as churn normalizes. Jefferies sees a return to margin expansion by late 2025, creating a better balance between growth and profitability.
Etsy currently trades at 9x 2026 EV/EBITDA, a steep discount to its historical average. The $55 price target implies limited downside risk while reflecting modest optimism about a long-term turnaround.
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