Investing.com -- Etsy was upgraded to Buy from Neutral by BofA Securities on Thursday, with the brokerage saying the online marketplace’s recent growth appears increasingly structural and that its estimates remain conservative.

BofA raised its price objective to $105 from $88, citing stronger execution under CEO Kruti Patel Goyal’s growth strategy, improving mobile engagement and the potential for more than $1 billion in share buybacks following the sale of Depop to eBay.

The brokerage said third-party data showed U.S. sales growth of 21% year over year in June and 17% in July, while mobile app gross merchandise sales continued to grow at a double-digit pace. Mobile users also have lifetime value about 40% higher than other buyers, suggesting further gains in personalization, conversion and marketing efficiency.

BofA raised its 2027 estimate for marketplace gross merchandise sales growth to 4.5% from 3%, while forecasting adjusted EBITDA of $912 million and non-GAAP net income of $676 million. It lifted its 2027 non-GAAP earnings-per-share estimate to $6.38 from $5.91, above its previous forecast and roughly in line with the Street.

The brokerage said conversational and agentic search could benefit Etsy because of its differentiated inventory of one-of-a-kind products, while lower digital advertising costs and greater use of owned marketing channels could provide additional operating leverage. It expects more than $1 billion of buybacks through 2027 after the Depop sale.

BofA based its new $105 price objective on 16 times projected 2027 non-GAAP earnings, below the 21-times median for U.S. e-commerce and marketplace peers. The brokerage said accelerating share repurchases make earnings per share a more relevant valuation measure than EBITDA.