UPDATE: Oppenheimer Downgrades Lending Club (LC) to Perform
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(updated to add analyst comments)
Oppenheimer analyst Jed Kelly downgraded Lending Club (NYSE: LC) from Outperform to Perform and removed their $25 price target.
The analyst commented, "We are downgrading LendingClub to Perform from Outperform and removing our $25 PT. We believe LC is on the correct roadmap in pivoting to a bank model once the Radius Bank acquisition receives regulatory approval and closes, expected early to mid-2021. However, management expects 2Q originations to decline 90% year/year, and the key initiative is now capital preservation in order to appease regulators. As a result, despite trading at 0.5x price to tangible book, we have a tough time identifying any near-term catalysts and expect shares to remain range-bound, based on a difficult fundamental backdrop creating limited visibility on originations and funding. We would become more constructive when we see a clear earnings path emerging from Radius to target financial equity investors."
Shares of Lending Club closed at $4.83 yesterday.
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