Pacific Crest Upgrades Lending Club (LC) to Overweight

Pacific Crest upgraded Lending Club (NYSE: LC) from Sector Weight to Overweight with a price target of $23. Analyst Josh Beck said conversations with advertising executives point to stable pricing trends.

"After speaking with advertising executives, we believe trends should be stable despite fears of irrational pricing. Our analysis of effective cost per funded loan, both offline and online, suggests that LendingClub can generate sustainable improvement in acquisition cost via conversion and channel mix. Our increased estimates may be too conservative," said Beck.

"We spoke with half a dozen advertising executives who specialize in consumer financial services. We picked up increasing levels of marketing activity and some moderate pricing increases, none of the behavior or trends stood out as irrational. Investor fears that unreasonable customer acquisition spending threatens the long-term viability of CLV:CAC ratios seems exaggerated relative to our channel checks," added the analyst.

For an analyst ratings summary and ratings history on Lending Club click here. For more ratings news on Lending Club click here.

Shares of Lending Club closed at $18.72 yesterday.

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