Meanwhile, Barclays analyst Ramsey El-Assal raised his price target on Upstart to $345
Shares of AI lending platform operator Upstart (UPST) are under pressure on Monday morning after Citi analyst Peter Christiansen downgraded the stock to Neutral from Buy as he reinstated coverage following a period of being under review. While he thinks the narrative is likely to remain positive, with continued loan growth momentum and volumes materializing in autos in 2022, the analyst points out that the stock has risen 644% to be one of the top FinTech performers year-to-date. He advises investors to wait for a better entry point.
ON THE SIDELINES: Citi analyst Peter Christiansen downgraded Upstart to Neutral from Buy with a $350 price target as he reinstated coverage after a period of being under review on the stock. While he thinks the narrative is likely to remain positive with continued loan growth momentum and volumes materializing in autos in 2022, the analyst points out that the stock has risen 644% to be one of the top FinTech performers year-to-date.
At current levels, he thinks the stock has priced-in Upstart achieving dominant market share of about 25% in "near-prime" personal loans, some share outside of "near-prime" and/or market expansion of about 10% share, and additional premium assuming Upstart breaks into another credit product. Therefore, the analyst thinks investors should wait for a better entry point.
Meanwhile, his peer at Barclays raised the firm's price target on Upstart shares to $345 from $230. Analyst Ramsey El-Assal kept an Overweight rating on the shares.
SHARE GAINS: On Friday, JMP Securities analyst Ronald Josey raised the firm's price target on Upstart to $327 from $205, while keeping an Outperform rating on the shares following his discussion with CFO Sanjay Datta at the JMP Securities FinTech Forum focused on artificial intelligence. The analyst is positive on the company's share gains in the personal lending market, advanced AI tools, and the potential to enter newer verticals. Datta also cited the barriers to replicating Upstart's data and models and the role that automation plays in the company's development cycle.
PRICE ACTION: In Monday morning trading, shares of Upstart have dropped over 2% to $296.13.