Analyst David Chiaverini of Wedbush maintained a Buy rating on LendingClub (LC – Research Report), with a price target of $11.00.
David Chiaverini has given his Buy rating due to a combination of factors including LendingClub’s solid quarterly performance and encouraging forward-looking guidance. The company’s loan originations exceeded expectations, and while the net interest margin (NIM) was lower than anticipated, this was counterbalanced by unexpectedly high fee income, which was bolstered by improved marketplace loan pricing. LendingClub also showcased favorable credit conditions, with a notable sequential decrease in net charge-offs and a loan loss provision at its lowest quarterly level in years. The strong demand for structured certificates and the potential for increased flexibility following the exit from a regulatory operating agreement further underpin the positive outlook.
The company’s guidance updates are incrementally positive, indicating solid plans for loan originations and pre-provision net revenue (PPNR) in the upcoming quarters. These forecasts are supported by new product and marketing initiatives aimed at driving loan originations throughout the year. Additionally, LendingClub’s strategy to manage whole loan retention and balance sheet growth is expected to contribute to a steady net interest income, despite anticipated NIM compression. The company’s credit trends appear stable to improving, and its discounted valuation relative to these fundamentals has led Chiaverini to maintain an Outperform rating, reflecting his positive outlook on the company’s financial trajectory.
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LendingClub (LC) Company Description:
LendingClub Corp. engages in the operation of an online credit marketplace for borrowers and investors. It offers personal, business, auto refinance, K-12 education loans and patient solutions. The company was founded by Renaud Laplanche and Soulaiman Htite on October 2, 2006 and is headquartered in San Francisco, CA.
