Etsy (NASDAQ:ETSY) shares were cut to Neutral from Buy, with its price target lowered to $67 from $114 per share at Citi in a note to clients Wednesday.
Analysts told investors that there are many debates, but with low visibility on 2024, they have decided to lower the rating on the stock.
"We believe there is limited visibility into 2024 GMS growth. Etsy has become one of the more debated names in our coverage universe," they stated.
"We see at least some headwinds to a return to stronger GMS/revenue growth, particularly near term. Key factors include student loan payments adding greater pressure on consumer discretionary spend (where Etsy squarely sits), a greater promotional environment, greater competition, comping the acceleration of its TAM opportunity, and more limited take-rate upside," they explained.
While over the longer term, Citi believes Etsy has an opportunity to accelerate and capture more of its total addressable market, in the near term, they still see "too many headwinds that could pressure discretionary spend and Etsy's opportunity to return to double-digit growth."
Etsy shares have declined more than 5% so far on Wednesday.