Earnings Reaction: Etsy Rises Again, Home Depot Slips

ETSY is trading at record highs once again

Feb 26, 2019 at 10:13 AM
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Etsy Inc (NASDQ:ETSY) stock is trading up 14.3% this morning at $67.07, already hitting a record high of $68.91, after the e-commerce company's quarterly earnings report yesterday evening. Not only did earnings and revenue come in above analysts's expectations, but the company's 2019 outlook was also strong. As such, at least four brokerage firms have come in with price-target hikes on ETSY shares, the highest of which was to $75 at KeyBanc.

The stock was already up 180% year-over-year coming into today, yet short sellers keep moving in. Looking at the last reporting period alone, short interest rose another 8.6%, putting 9.1 million shares in the hands of short sellers, or 5.6 times the average daily trading volume. The potential of a short squeeze, which we could already be seeing today, is one reason we've been making a bullish case for Etsy.

For Home Depot Inc (NYSE:HD), put traders seemingly hit the nail on the head, as shares of the retailer are down 3.4% to $183.61. Investors are focusing on the company's surprisingly weak full-year earnings outlook, with analysts and Home Depot CEO Craig Menear calling out the negative impact that unusually wet conditions had on the company's results, likely resulting in fewer outdoor renovation projections across the U.S.

Today's slide puts HD stock back below the 200-day moving average, and takes it further away from its Sept. 12 record high of $215.43. No analyst notes have yet to come through this morning, but it's worth noting that most of Wall Street is quite bullish on the blue chip. Specifically, 15 of 21 brokerage firms recommending buying the stock.

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