Morgan Stanley Sees Growth Thesis Remaining Intact For Santander Consumer USA Holdings

In a report published Monday, Morgan Stanley analyst Cheryl M. Pate reiterated an Overweight rating and $30.00 price target on

. In the report, Morgan Stanley noted, “While SC was conservatively being more selective in Chrysler Capital loan volumes early in 2Q when management viewed 640-750 FICO loans as mispriced, management noted that volumes have been strong in June and pricing dynamics have improved. Additionally, the penetration targets required from the Chrysler relationship limit the downside risks to origination volumes, in our view. "While we expect more loan sales in near-prime / upper subprime buckets at the margin, we had always expected all prime originations to be sold through SC's flow programs. Moving from our prior estimate of ~33% sales in the non-prime bucket to 40-45% does not impact our estimates as higher servicing / gain on sale revenues and lower provisioning offset lower net interest income on a smaller retained portfolio.” Santander Consumer USA Holdings closed on Friday at $18.76.