A number of negative catalysts are set to drive shares of Etsy lower, according to Goldman Sachs. Analyst Eric Sheridan downgraded the e-commerce stock to sell from neutral and slashed his price target by $25 to $45, which implies more than 9% downside from Monday’s close. The stock fell more than 4% in the premarket following the call. Shares have had a tough year, losing nearly 39%. But Sheridan sees further losses ahead thanks to an “unfavorable” risk-reward profile. “While Street estimates (and our own modeling) seek to reflect more normalized growth levels in a better backdrop for discretionary consumer spending, visibility remains low on the timing of any such recovery,” the analyst said, noting that consensus gross merchandise sales estimates for next year have already been revised down. “We monitor consumer survey data from HundredX, which currently does not suggest an imminent positive inflection in purchase intent.” ETSY YTD mountain ETSY, year-to-date With that, Sheridan thinks that Etsy will continue to lose market share in the years to come, seeing low-single-digit buyer growth over time. “We expect that active buyer growth will remain the largest determinant of the level of GMS growth,” he said. “On net, we believe that the analysis points to a lower likelihood of ETSY meaningfully compounding GMS above long-term Street estimates.” Not only that, the analyst also said it’ll be a challenge for the company to keep up stable margins. Specifically, he believes that margins could be pressured if Etsy “leans further into investments to stimulate growth.” As a result, he thinks the Street is likely forecasting “too much” margin expansion.