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Citi Says Don't Buy Etsy Shares Here

Citi Says Don't Buy Etsy Shares Here

Shares of Etsy Inc (NASDAQ: ETSY) hit an all-time low of $8.40 immediately following the company's earnings report in early May. But the stock quickly rebounded as investors become optimistic that an activist investor campaign and a new management slate could result in a potential sale of itself.

Wait And See

But with shares trading north of $13 per share on Wednesday, analysts at Citi aren't prepared to recommend investors accumulate new positions in Etsy's stock.

Citi's Mark Kelley commented in a research report that he isn't optimistic that Etsy will sell itself in the near term. But investors who already own the stock shouldn't necessarily look to sell; the analyst thinks Etsy could fetch a price tag of $21 to $22 per share in any eventual sale.

However, Kelley also thinks that as a standalone entity Etsy is worth just $7 per share; operating alone implies little to no improvement in operational performance.

Justification For The Downgrade

As such, the analyst is downgrading Etsy's stock rating from Buy to Neutral with a $14 price target, which is in line with its last 12-months average and comps.

Bottom line, Kelley argued that "the market is hoping for near-term M&A but holding on to this thinking could disappoint investors."

Related Links:

Analyst: Etsy Could Make Sense For eBay, But Sale Over Near Term Is Unlikely

Etsy Hits Highest Level Of 2017

Latest Ratings for ETSY

Sep 2019UpgradesNeutralOutperform
Aug 2019MaintainsHold
Jul 2019UpgradesNeutralBuy

View More Analyst Ratings for ETSY
View the Latest Analyst Ratings

Posted-In: Citi Etsy Mark KelleyAnalyst Color Downgrades Price Target Analyst Ratings Tech Best of Benzinga


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