LendingClub Corp (NYSE:LC) shares rose over 11% today, after the Wall Street Journal reported that the lending company is in talks with Citigroup to have the bank purchase more debt generated through the online lending marketplace.
In reaction, BTIG analyst Mark Palmer reiterated a Buy rating on shares of LendingClub, with a $9 price target, which implies an upside of 86% from current levels.
Palmer commented, “The report did not indicate whether such financing represented a commitment to purchase loans on LC’s platform or the provision of capital such that the company could take loans on to its balance sheet, although we have received no indication from management that it intends to pursue anything other than a marketplace approach.”
Furthermore, “While LC’s issues are the subject of at least a couple of regulatory investigations, we believe those inquiries are much less important to the prospects of the company and its stock than are indications that it will have sustainable sources of funding going forward, ideally in the form of buyers of the loans offered on its marketplace platform. We believe it is unlikely that the result of any of the investigations is likely to amount to much if anything given our take on the offenses in question, even while access to funding represents an existential question for LC.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark Palmer has a yearly average return of -9% and a 42% success rate. Palmer has a -51% average return when recommending LC, and is ranked #3824 out of 3958 analysts.
Out of the 13 analysts polled by TipRanks (in the past 3 months), 3 rate Lendingclub stock a Buy, 7 rate the stock a Hold and 3 recommend a Sell. With a return potential of 44%, the stock’s consensus target price stands at $6.95.