Investing.com -- Truist Securities raised its price target on Etsy (NASDAQ:ETSY) to $60 from $55 on stronger-than-expected second quarter and signs of accelerating user growth.
The brokerage said Etsy’s marketplace revenue is running ahead of Wall Street expectations.
It now forecasts second-quarter marketplace revenue of $463 million, above the consensus estimate of $455 million.
Monthly active user growth has also picked up, with year-over-year gains in May reaching the highest level in nearly two years, according to app data from Sensor Tower.
Truist attributed the improvement to Etsy’s efforts in refining search and product quality and gaining ground in online ad placements.
The firm maintained a Buy rating on the stock and raised its full-year revenue and EBITDA forecasts slightly, noting that Etsy is benefiting from recent investments in growth initiatives.
Truist also said Etsy appears relatively better positioned to weather potential changes to U.S. import tariffs, including the possible removal of the de minimis exemption.
Roughly half of Etsy’s gross merchandise sales come from domestic U.S. transactions, with the rest split between cross-border and international activity.
Etsy completed the sale of its music gear platform Reverb earlier this month, a move expected to lift profit margins and help management refocus on its core marketplace.
The company also recently announced a $650 million convertible note offering, with part of the proceeds earmarked for stock repurchases.
While Etsy faces headwinds from softer organic search traffic, Truist noted the company is increasing its presence on paid social media channels and connected TV advertising, which could support re-engagement and sales in the second half of the year.