Morgan Stanley Upgrades Robinhood to Overweight with $150 Price Target
Roger Morgan Stanley upgraded its rating of Robinhood Markets to Overweight from Equal-weight on Tuesday, raising its price target to $150 from $124. This move came as other cryptocurrency-related stocks declined in premarket activity.
The bank's analysts pointed out that Robinhood's expanding product lineup, stronger customer engagement, and growing asset-based revenues could support further growth. They noted that the company's assets per customer increased 23% year over year, while Gold users held about 4.2 times the average customer's assets under custody.
Morgan Stanley also highlighted Robinhood's ability to generate more revenue from its existing customer base rather than relying primarily on growth in funded accounts. The company now has 13 business lines generating more than $145.7 million in annualized revenue, according to the bank.
The analysts raised their earnings-per-share estimates for the next three years by 12%, 14% and 15%, respectively. Morgan Stanley expects Robinhood's revenue to grow at a 23% compound annual growth rate through 2028, reaching $11.7 billion, about 6% above consensus estimates.