Why 2 Sofi Analysts Are Dropping Their Bullish Stances: Elevated Interest Rates A Possible 'Incremental Headwind'

Shares of SoFi Technologies Inc SOFI remained under pressure in early trading on Friday, after ending the previous session in the red, following a downgrade by Oppenheimer analysts.

Piper Sandler On SoFi Technologies

Analyst Kevin Barker downgraded the rating for SoFi Technologies from Overweight to Neutral, while raising the price target from $6.50 to $8.

The stock added 107% year to date, “compared to consumer lending peers +15% on average and a basket of fintech stocks down ~10%,” Barker wrote in the downgrade note.

Some outperformance may have been warranted in case there was a “significant decline in interest rates driving better margins and more attractive lending opportunities (i.e. student loans),” the analyst said.

He added that rates have risen in the past two months, “which will be an incremental headwind in the near-term, and we are increasingly concerned rates could remain higher for longer due to persistent inflation.”

Check out other analyst stock ratings.

BofA Securities On SoFi Technologies

Analyst Mihir Bhatia downgraded the rating for SoFi Technologies from Buy to Neutral, while raising the price target from $9.50 to $10.

“SoFi Technologies (SOFI) shares are up 100% over the past month vs. a 7% increase in the S&P 500, mainly because the debt deal brought certainty that the Federal Student Loan payment moratorium would end in September,” Bhatia wrote in another downgrade note.

“While we agree the payment moratorium expiry is a positive, we now see the positive fundamental aspects of the story as largely priced in,” the analyst said. “We also note that SOFI's 2023 outlook already assumes the moratorium would expire and we do not expect a major earnings revision cycle,” he added.

SOFI Price Action: Shares of SoFi Technologies had declined by 9.75% to $8.62 on Friday at publication.

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