Oppenheimer Upgrades Etsy Stock to Outperform, Sets $90 Target on AI Search Benefits

Oppenheimer Upgrades Etsy Stock on AI Search Momentum

Oppenheimer has upgraded Etsy's stock to outperform from perform, setting a $90 price target that implies 21% upside from Monday's close1

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. Analyst Jason Helfstein cited AI search benefits, product improvements, and app engagement gains as key drivers behind the online marketplace's improved outlook2

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. The upgrade comes as consumers increasingly rely on AI for virtual shopping rather than traditional search engines, positioning Etsy to capture growing demand through AI-powered search capabilities.

Consumer Shift Toward AI-Powered Shopping

Consumers are moving away from Google Search for online shopping, instead embracing AI tools for product discovery, according to a recent Oppenheimer consumer survey of 2,500 U.S. consumers2

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. Adobe Analytics data reinforced this trend, showing that nearly half of U.S. consumers used AI for online shopping in June1

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. Notably, 88% of surveyed consumers reported going directly to Etsy's website or app rather than through Google Search, suggesting the platform has built a strong competitive moat and reduced dependence on traditional search engines2

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. This direct traffic pattern indicates that product improvements are resonating with users and making product discovery easier.

Gross Merchandise Sales Growth Forecast

Oppenheimer now forecasts 5% gross merchandise sales growth for 2027 and 2028, even as Etsy loses ground in the online handmade market2

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. The investment firm raised its 2026 gross merchandise sales forecast by 1%, positioning it at roughly the high end of Street estimates2

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. Third-party data from SimilarWeb suggests third-quarter non-app buyers were flat year over year, versus down 3% in the second quarter—the first positive quarter since around 20232

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. Helfstein noted this trend suggests the high end of GMS guidance is achievable, even as the analyst assumes the handmade market will grow about 9% annually through 20282

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Improved App Engagement and Product Quality

The Oppenheimer consumer survey revealed healthy demand signals, with 65% of respondents saying they were very or somewhat likely to buy an item from Etsy2

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. Consumers have noted improvements in Etsy's product listings and descriptions, which should promote more sales on the platform and make product discovery easier1

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. These app engagement gains and product enhancements suggest Etsy's recent platform investments are paying off, helping the online marketplace differentiate itself in an increasingly competitive e-commerce landscape.

Valuation and Market Position

The $90 price target is based on 12 times Oppenheimer's 2027 EBITDA estimate, representing a 10% discount to eBay despite similar growth trajectories2

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. Helfstein noted that Etsy's stock trades at about 10 times 2027 EBITDA, compared to eBay at 13 times2

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. Oppenheimer's outperform rating goes against Wall Street consensus, where 20 of 33 analysts covering Etsy maintain a hold rating, while just 12 have a buy or strong buy recommendation1

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. Etsy's stock has risen 24% year to date and gained 2% in premarket trading following the upgrade1

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. Watch for how Etsy's AI-powered search capabilities continue to drive direct traffic and whether the platform can maintain momentum as AI shopping tools become mainstream.