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Wall Street Analysts Fleeing LendingClub: Stifel Downgrades, William Blair Drops Coverage

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Shares of LendingClub Corp (NYSE: LC) lost 34.37 percent on Monday, following the announcement of the resignation of the company’s Founder, CEO and Chairman, Renaud Laplanche, and two other senior executives. The departures came after news that the company had misplaced the sale of a relatively small amount of loans, $22 million, and re-dated another $3 million in loans.

Following these events, analysts at Stifel downgraded the stock from Buy to Hold, removing their price target of $22.00. William Blair suspended coverage on the stock.

Related Link: LendingClub's 'Market Place' Funding Model Might Be Broken

Stifel experts explained that their thesis on LendingClub was based on the opportunity for the company to “build a multi-product suite of services on top of its initial unsecured lending platform.” In fact, the analysts added they had “put a lot of faith in the team’s ability to execute and build trust with lenders and consumers.” Now, this trust has been shaken and the company’s long-term prospects put in question.

For their part, researchers at William Blair said they were suspending their rating on LendingClub in account of the “violation of the company’s business practices along with the lack of full disclosure during the review, [and] an unrelated material weakness in internal control in financial reporting related to the failure to disclose personal investment interests held in a third-party fund.” The firm cited the lack of guidance as one more reason to no longer rate the shares.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Latest Ratings for LC

DateFirmActionFromTo
May 2019UpgradesNeutralOutperform
Aug 2018MaintainsNeutralNeutral
Jul 2018MaintainsNeutralNeutral

View More Analyst Ratings for LC
View the Latest Analyst Ratings

Posted-In: Analyst Color Long Ideas News Termination Downgrades Price Target Management Analyst Ratings

 

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