Morgan Stanley Upgrades Robinhood to Overweight with $150 Price Target

Rocketing towards growth, Robinhood Markets (HOOD) saw its stock surge in premarket trading on Tuesday after Morgan Stanley upgraded the online trading platform to Overweight from Equal-weight. The price target was also raised to $150 from $124.

This upgrade comes amidst a broader decline in cryptocurrency-related stocks, with Coinbase and Strategy trading lower. However, Morgan Stanley's analysts remain bullish on HOOD, citing its expanding product lineup, stronger customer engagement, and growing asset-based revenues as key growth drivers.

The bank highlighted Robinhood's ability to generate more revenue from existing customers rather than relying on new users. With 13 business lines now generating over $100 million in annualized revenue, the company is poised for further expansion.

Morgan Stanley also emphasized the potential of prediction markets, which have seen significant growth with event contract revenue reaching $156 million in the second quarter. This represents a major opportunity for HOOD to increase customer engagement and revenue.