Home / Business and Economy / Upstart's Bank Plan: A $43 Share Surge Ahead?
Upstart's Bank Plan: A $43 Share Surge Ahead?
16 Mar
Summary
- BTIG upgraded Upstart stock, setting a $43 price target.
- Upstart plans to apply for an insured national bank charter.
- A bank charter could significantly boost Upstart's EPS by 60%.
BTIG has upgraded Upstart's stock from neutral to buy, assigning a $43 price target that implies a 63% potential increase. Analyst Vincent Caintic highlighted Upstart's recent announcement of its plan to apply for an insured national bank charter.
This move is seen as a significant step to mitigate Upstart's exposure to private credit markets. The bank charter would provide a crucial downside protection, particularly if liquidity for current funding partners diminishes.
Analysts anticipate substantial cost savings, including the elimination of fees paid to partner banks and reduced operational expenses. Furthermore, the bank charter could enhance Upstart's customer reach and establish a uniform national regulatory framework, potentially increasing annual earnings per share by 60%.
Despite shares plunging 40% this year amid broader market downturns, BTIG believes the current stock price does not reflect potential upsides from the bank charter initiative and overestimates liquidity risks.
