Etsy falls after Goldman Sachs turns bearish on the online retail stock

Etsy (NASDAQ:ETSY) turned lower in early trading on Tuesday after Goldman Sachs downgraded the online retail stock to a Sell rating from Neutral.

Analyst Eric Sheridan said that while the current Street estimates reflect more normalized growth levels in a better backdrop for discretionary consumer spending, the visibility remains low on the timing of a recovery of that sort. “We monitor consumer survey data from HundredX, which currently does not suggest an imminent positive inflection in purchase intent,” he noted.

Sheridan also warned that Etsy (ETSY) could lose market share over the next few years. “We believe that the analysis points to a lower likelihood of ETSY meaningfully compounding GMS above long-term Street estimates,” he warned. On the profit line, Etsy (ETSY) is seen facing margins headwinds, which could lead to earnings disappointments.

Goldman Sachs assigned a price target of $45 to Etsy (ETSY).

Etsy (ETSY) fell 4.45% in premarket trading on Tuesday to $47.40, which is below the 52-week low of $48.07. Short interest on ETSY stands at 14.8% of the total float. Etsy (ETSY) has not yet set the timing of its Q3 earnings report.