LendingClub Initiated at Citi at Neutral with $23 Price Target

Citi Research initiated LendingClub with a neutral rating today. Citi put a price target of $23 on the stock, suggesting a 5 percent upside.

Citi notes that the addressable market size is huge between consumers and small/mid-sized businesses, and that the market size is poised to expand by product and geography. Additionally, Citi is impressed by LendingClub’s consistent growth – with the second derivative of growth continuing to accelerate.

However, the analysts note that the current valuation reflects many of these new opportunities for growth, namely the expanding credit spectrum that LendingClub services, international launches and an entrance to new asset classes. For risks, Citi sees three: (1) competition, (2) interest rates, and (3) regulation.