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Author: Alan LittleDate: 2021-04-27

Etsy (ETSY) -4% on Monday after KeyBanc downgrades rating

E-commerce website Etsy (ETSY) slipped 4.11% in Monday’s trading after long-time bull KeyBanc downgraded its rating for the company on the “lower likelihood of near-term beats”. 

 

Etsy has forged a reputation as a unique online retailer with its mix of handmade and vintage goods, and it even won the approval of Tesla (TSLA) CEO Elon Musk, who tweeted “I kinda love Etsy” earlier this year. 

 

However, KeyBanc’s Edward Yruma is not as optimistic as he once was after stating that the company’s current stock valuation is “fair” and that positive earnings revisions are unlikely in the short term. 

 

Yruma did note that Etsy “remains one of the best long-term growth opportunities in our coverage”. 

 

KeyBanc set an outperform rating for the Brooklyn-based company way back in late 2017 and Etsy has performed better than the broader market since then.  

 

KeyBanc also said that 2020 would be a “banner year” for Etsy, which proved to be accurate as the company logged $1.1bn in revenue during the first nine months of that calendar year, which was a 100+% increase. 

 

Back in February, Etsy came in with $1.08 earnings per share as net income soared, while revenue rose from $270m to $617m.  

 

Analysts are not expecting similar blockbuster numbers in Q1 though, with the current consensus for $0.59 per share earnings and $516m revenue.  

 

While Etsy’s fundamentals look solid, Yruma decided to set a lower sector weight for the company on Monday. 

 

Following the downgrade, ETSY shares traded lower on the Nasdaq on Monday, falling 4.11% to $205.78 by around 1pm ET. 

 

This week is set to be a busy one for Q1 earnings, with Tesla, Apple (AAPL), Amazon (AMZN) and Microsoft (MSFT) among those set to report before Friday.  

 

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