LendingClub Corp LC seems to have a stable outlook and appears poised for a return to growth, Morgan Stanley’s James E. Faucette said in a report. He upgraded the rating on the company from Equal Weight to Overweight, while establishing a price target of $7.
Analysts are largely bullish on LendingClub’s EPS, scheduled to be reported Thursday.
7 Reasons To Be Positive
Faucette mentioned the following positives for LendingClub:
- New management hires: The several key hires recently made by the company have “the right blend of backgrounds to restore investor confidence and get the business back on track,” Faucette commented.
- Stable capital availability: Feedback from institutional and retail investors indicate limited downside risk to origination, suggesting stable capital availability for 2017.
- Sustainable data analytics advantage: “We expect slow progress from banks to keep the advantages established by FinTechs firms such as LC intact over the near term,” the analyst wrote.
- No brand damage: Faucette believes that there is no evidence suggesting any damage to LendingClub’s brand among borrowers.
- Incremental data suggest stability: “SEC data show trough is past; competition is more hamstrung; banks are returning to invest more quickly than expected; new product launch indicates LC is back to normal operating rhythms; securitization volumes show robust interest in marketplace assets,” the Morgan Stanley report noted.
- Pricing flexibility: LendingClub has witnessed only a modest increase in loss rates, similar to that experienced by other consumer lenders. The company has the flexibility to raise pricing.
- Risk/reward attractive: Given LendingClub’s long-term opportunity, the stock appears “inexpensive against internet comps” and provides downside protection.
The company now faces competition from Marcus, Goldman Sachs Group Inc GS's online consumer-lending platform that went live in October.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Date | ticker | name | Actual EPS | EPS Surprise | Actual Rev | Rev Surprise |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.