LendingClub Seen 'Stair-Stepping' To $8 By Year's End

Analysts at Morgan Stanley see LendingClub Corp LC “stair stepping” to its $8 price target by the year's end. Investor interest remains strong despite weaker-than-expected Q1 origination activity. Shares are down over 6 percent on Thursday following the company's earnings release.

“Impact from tightening of credit standards and fact that LC is only now transitioning focus back from remediation to borrower activity will make 2017 expectations more back-end weighted, but we expect LC to end 2016 at a better place than we had anticipated,” said Morgan Stanley.

Analysts are expecting a return to year-over-year growth in the second quarter of 2017 and “clearly profitable margins exiting in 4Q17.” Morgan Stanley believes the company does not need additional large institutional agreements to hit its revenue guidance.

Morgan Stanley maintains an Overweight rating on the stock.