Piper Sandler has adjusted its outlook on Lending Club (NYSE: LC), increasing the price target to $15.00 from the previous $13.00 while maintaining an Overweight rating on the stock.
The revision follows Lending Club's third-quarter earnings for 2024, which surpassed expectations.
The financial services company reported a robust quarter, outperforming estimates and previously set guidance. This success was largely attributed to a rise in net interest income (NII) and improved pricing on loan sales.
Following these results, Lending Club also revised its pretax, pre-provision net revenue (PPNR) guidance upward to a range of $60-70 million, from the earlier forecast of $40-50 million.
Despite anticipating a seasonal slowdown in the fourth quarter of 2024, Lending Club has decided to maintain its origination guidance between $1.8 and $1.9 billion.
The company credits its ongoing product innovation and a slight increase in paid marketing efforts for its ability to sustain origination growth in a typically quieter period.
Additionally, Lending Club has observed a consecutive third-quarter improvement in loan sale prices as banks resume purchasing, although the prices have not yet returned to the company's historical average. This suggests that there is considerable potential for further price enhancements in the future.
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