EToys Inc (Nasdaq: ETYS) skipped up 14 percent Wednesday after Goldman Sachs upgraded the stock as the bullish holiday forecasts kept rolling in. The company also announced a new "Idea Center" for its site.
Shares were up 8 1/16 to 67 11/16 after Goldman lifted the stock to a "trading buy" rating from a "market outperform." Details of the upgrade were not immediately available. The stock has been on the rise since holiday forecasts started coming out this August.
The stock closed at 59 5/8 Tuesday after several reports heralded the rise in holiday shopping online. A report from Forrester Research Inc said online sales should reach $20.2 billion this year as seven million Internet shoppers make their first electronic commerce purchases, and a survey by Greenfield Online mentioned the online toy retailer.
Greenfield Online's survey on holiday shopping said most shoppers would use emerging e-commerce businesses rather than Websites tied to department stores or catalogs.
Greenfield's survey said 70 percent of Internet users planned to do some or all of their holiday shopping online with Amazon.com (Nasdaq: AMZN), CDnow (Nasdaq: CDNW) and eToys Inc. (Nasdaq: ETYS) being the main destinations. Toys R Us Inc. (NYSE: TOY) was ranked fourth.
Toys could overtake computer software this year, the Greenfield survey of 4,849 computer users said. The survey found compact discs were expected to be the most widely purchased item, followed by books and computer software, respectively.
An estimated 49 million U.S. households will spend $184 billion online by 2004 and will drive a new type of retailer that is savvy about using customer information, Forrester said.
More bullish forecasts came out from Alexander Cheung, an Internet fund manager for Monument Funds Group. Online holiday sales in 1999 are expected to more than triple from last year's $3 billion, according to Cheung.
"We expect there will be a tremendous ramp-up in online purchases this year,'' said Cheung in a conference call with reporters, citing Etoys as one of many companies bound to profit.
Etoys' also unveiled its new "Idea Center," which has links informative editorial content with product lineup. The site has editorial collaboration from Washington's National Zoo, New York's American Museum of Natural History, and individuals such as a Nobel Prize-winning physicist.