Etsy stock experienced a decline on Wednesday after a team of analysts expressed worries about the online marketplace’s sales performance.
Citi analysts Ygal Arounian and Maxwell Moore downgraded Etsy shares (ticker: ETSY) from Buy to Neutral, lowering their price target from $114 to $67. Their decision was primarily based on the “limited visibility” they have into the company’s sales growth for next year.
During late morning trading, shares dropped by 4.6% to $61.65, marking their lowest close since April 17, 2020 when they fell to $61.06, according to Dow Jones Market Data. This year, the stock has experienced a 49% decline.
In the near-term, the Citi analysts identified several factors that could potentially hinder revenue growth. These factors include a potential decrease in consumer discretionary spending due to the resumption of student loan payments, an increase in competition, and elevated promotional activities.
“While we still believe that Etsy has the potential to accelerate and capture a larger share of its total addressable market in the long run, we acknowledge the existence of various headwinds that could impede discretionary spending and hinder Etsy’s ability to achieve double-digit growth in the short term,” stated the analysts.
Overall, analysts hold mixed opinions about the company’s prospects, with 50% rating it as Buy, 41% as Neutral, and 9% as Sell, according to FactSet.
Etsy is scheduled to release its third-quarter results on November 1 after the market closes.