Why This LendingTree Analyst Cut Price Target By 57%

There is heightened uncertainty around LendingTree Inc’s TREE second-quarter earnings due to macro headwinds, according to BofA Securities.

The LendingTree Analyst: Nat Schindler maintained a Buy rating for LendingTree, while reducing the price target from $190 to $80.

The LendingTree Thesis: The company has lowered its second-quarter guidance due to rising interest rates and elevated inflation levels, Schindler said in the note.

“In the Home segment, rising interest rates have led to doubling of mortgage rates over the last 6 months, causing a steep decline in loan re-finance volumes and pressuring new purchases,” the analyst wrote.

“The recovery in the Insurance segment is also slower than expected, as insurers face rising loss costs due to inflation, thereby shrinking insurer marketing budgets,” he added.

Schindler further mentioned that the consumer segment could remain strong, while the insurance recovery is likely to accelerate in the back half of the year.

TREE Price Action: Shares of LendingTree are down 2.71% to $49.64 at the time of publication Tuesday morning.

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