Etsy (NASDAQ:ETSY) and Revolve Group (NYSE:RVLV) experienced a decline in morning trading on Wednesday amid caution from Goldman Sachs over tightening consumer discretionary spending trends.

Downgrade and Warnings

Goldman Sachs repositioned Etsy (ETSY) to a Neutral rating from Buy. Analyst Alexandra Steiger and team warned that Wall Street estimates already fully incorporate Etsy’s (ETSY) growth potential in the coming years. This led to a reduction in the price target on Etsy (ETSY) to $80 from $84.

Simultaneously, Goldman Sachs initiated coverage on Revolve Group (RVLV) with a Sell rating due to pessimism regarding current industry headwinds in the high-end online apparel space and the potential for margins to contract. Analyst Steiger cautioned, “Our Sell rating reflects our less favorable 12-month risk/reward view as the pressure observed across the high-end online apparel industry may persist, leading to further downward revisions to Street estimates, which were revised lower through 2023.” The firm’s price target on RVLV of $12 represents over 20% downside potential.

Sliding Stock Prices

Shares of Etsy (ETSY) dipped by 1.50% in early trading on Wednesday, while Revolve Group (RVLV) slid by 5.75%. The Seeking Alpha Quant Rating on Etsy is classified as Hold, whereas the quant rating on Revolve Group (RVLV) signals Sell due to low factor grades for growth, valuation, and earnings revisions.