JPMorgan upgraded Etsy and slapped a 20% price target on it. Based on strong second-quarter sales growth. Because if something went up last quarter, it must go up next quarter. That's science.
The bank looked at earnings that already happened and decided those earnings predict earnings that haven't happened yet. Revolutionary stuff. Nobody has ever tried this before. Except every analyst at every bank since 1970, with a success rate that would get you fired from a carnival guess-your-weight booth.
Etsy sells handmade soap and wooden signs that say "Live Laugh Love" to women named Jennifer. JPMorgan thinks this business model justifies another 20% move higher. They arrived at this conclusion using discounted cash flow models and comparable company analysis. Two methods that work perfectly in spreadsheets and fail spectacularly in reality.
The upgrade came out this week. Retail traders saw the JPMorgan logo and bought shares immediately. Because when you're trying to make money in the stock market, the best strategy is doing exactly what a bank tells you to do several days after they've already positioned themselves. That's never backfired.
Here's what actually matters: Etsy has a chart. That chart has support and resistance levels. It has moving averages. It has volume patterns. None of those things care what JPMorgan thinks about quarterly sales growth. The 200-day moving average doesn't read analyst reports. It just sits there being a line.
But sure, let's all trade based on JPMorgan's opinion about macramé plant hangers. Let's ignore the fact that banks upgrade stocks after they've already run, downgrade them after they've already crashed, and maintain price targets that expire worthless like gas station sushi. That sounds like a winning plan.
Twenty percent higher. They put a number on it and everything. Very precise. Very scientific. Almost makes you forget that last year JPMorgan had a price target on something else that was also very precise and very wrong.
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