Etsy stock price target raised to $62 from $45 at UBS on improved outlook

Investing.com - UBS raised its price target on Etsy (NASDAQ:ETSY) to $62 from $45 while maintaining a Neutral rating, citing improved growth expectations for fiscal year 2025. Currently trading at $59.64, Etsy maintains a "GREAT" financial health score according to InvestingPro analysis.

The investment bank increased its FY25 gross merchandise sales (GMS) and EBITDA estimates by 2.6% and 5% respectively, now projecting a 7.7% year-over-year decline in GMS and $730 million in EBITDA.

UBS expects Etsy’s core GMS to accelerate by 5 percentage points from Q1 2025 to Q4 2025, with a 70 basis point incremental foreign exchange tailwind contributing to the improved outlook.

For Q3 2025, UBS models core Etsy GMS to accelerate 210 basis points to a 7% year-over-year decline excluding foreign exchange effects, noting that Q3 2024 faced headwinds from election events in multiple countries, sporting events, and Hurricane Helene.

Despite the higher price target, UBS views Etsy’s valuation as "full" at $60 per share, trading at 23 times price-to-earnings compared to eBay (NASDAQ:EBAY)’s 13 times P/E with 1.3% year-over-year GMV growth. InvestingPro analysis suggests the stock may be slightly undervalued, with 11 additional exclusive insights available to subscribers.

In other recent news, Etsy has announced the pricing of $650 million in convertible senior notes due 2030, with an interest rate of 1.00%. The company plans to use approximately $150 million of the proceeds to repurchase shares of its common stock at $60.20 per share, with the remainder allocated for general corporate purposes. Additionally, Truist Securities has increased its price target for Etsy to $60.00, citing positive growth data, including an acceleration in monthly active user growth. This comes as Etsy’s Marketplace revenue is reportedly tracking ahead of consensus estimates. Meanwhile, Morgan Stanley (NYSE:MS) has upgraded Etsy’s stock rating to Equalweight, noting a shift in its valuation compared to eBay. Citizens JMP has reiterated its Market Perform rating, pointing out the competitive pressures within the retail sector. Despite these pressures, Etsy’s unique inventory remains a strength, according to the firm. The convertible notes offering and analyst updates reflect recent developments for the company.

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