Morgan Stanley Lifts HOOD to Overweight with Price Target of $150
Morgan Stanley has upgraded Robinhood Markets' (HOOD) stock to Overweight from Equal-weight, raising its price target to $150. This move comes as broader cryptocurrency-related stocks decline.
The bank cited Robinhood's expanding product lineup, stronger customer engagement, and growing asset-based revenues as key drivers of the upgrade. Analysts led by Michael Cyprys noted that the company's broader product capabilities are improving the economics of its installed customer base.
Morgan Stanley also raised its earnings-per-share estimates for the next three years by 12%, 14%, and 15%. The bank highlighted Robinhood's ability to generate more revenue from its existing customer base, with 13 business lines generating over $100 million in annualized revenue. Prediction markets were identified as a major growth opportunity, with event contract revenue increasing to $156 million in the second quarter.
The upgrade comes despite lower crypto forecasts, and Morgan Stanley expects Robinhood's revenue to grow at a 23% compound annual growth rate through 2028, reaching $8 billion. The bank also sees potential catalysts for further growth, including the HOOD Summit and Rothera's perpetual futures.