Etsy's stock price rose 3.07% to $56.57 after the upgrade from Wedbush, which raised its rating on the tech firm's stock to outperform from neutral.
Wedbush analyst Ygal Arounian boosted the firm's price target to $66 from $64, citing a rosier outlook for its new Etsy Ads initiative and its offer of free shipping.
Etsy, which runs a software platform on which independent crafts retailers can sell their wares, last month meshed its ad platform featuring promoted listings with its Google Ads function to create Etsy ads.
The new ad platform gives crafts retailers exposure both on the Etsy site with its promoted listings and beyond through its Google ads tool, the company said in its rollout.
Etsy also announced plans to boost its spending on marketing and brand awareness, including TV ads.
The Wedbush report cited favorable timing for the new Etsy initiatives as the holiday sales season approaches, with "early signs" of a solid return from its TV ads and marketing on social media.
After taking a hit after a mixed quarterly sales report last month, Etsy's stock has been on the mend as of late, rising 4.2% to $54.88 on Thursday.