Analysts Remain Buyers of LendingClub Corp (LC) and FuelCell Energy Inc (FCEL); Here’s Why

Analysts remain Buyers on troubled fintech firm LendingClub Corp (NYSE:LC) and fuel-cell maker FuelCell Energy Inc (NASDAQ:FCEL), as one company recently parted ways with its CEO and three senior managers, while the other company hosted an investor meeting and a tour of the company’s facilities.

LendingClub Corp

LendingClub shares have been under pressure recently after the company acknowledged it conducted an internal review of its business practices. As a result, CEO Renaud Lalplanche had resigned along with three senior managers.

However, BTIG analyst Mark Palmer remains positive, reiterating a Buy rating on the stock with a price target of $9.00. Palmer sees nothing that refutes the fundamental thesis regarding the business or the marketplace for lending in general. Further, Palmer disagrees with the media’s assertion that LC conducted shady practices similar to those done by the large institutional banks during the financial crisis. What makes LC different, in Palmers’ view, is that the company uses technology to create a cost arbitrage and more efficient capital allocation. Consequently, LC has a low cost of operation facilitated by its algorithm.

Palmer believes the value proposition of LC (taking consumers out of 19% APR credit cards and putting them into 12% term loans) is still intact. Palmer does not see how the news has much relevance to the average retail investor nor is it relevant to credit performance or loan pricing. The key question Palmer raises is that those assessing LC should focus on whether the company is able to attract sufficient institutional investors to its platform to have it continue to work.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark Palmer has a yearly average loss of 12% and a 36% success rate. Palmer is ranked #3807 out of 3911 analysts.

Out of the 11 analysts polled by TipRanks (in the past 3 months), 3 analysts rate LendingClub stock a Buy, 5 rate the stock a Hold and 3 analysts rate the stock a Sell. The stock’s consensus target price is $9.29, marking a potential upside of 136%. 

FuelCell Energy Inc

Roth Capital Craig Irwin updates investors on FuelCell Energy, following an investor meeting at the company’s facilities. Irwin reiterated a Buy rating on the stock and provided a price target of $12.

Irwin hosted an investor meeting with CFO Mike Bishop and VP of IR Kurt Goddard at the company’s Torrington, CT manufacturing facility and had the chance to tour the plant. Irwin highlights that FCEL plans to expand company manufacturing capacity form 70MW to 100MW and appear to remain on track and progressing well towards making that push. The company has added certain equipment to facilitate the expansion into existing product lines, where automation should be able to drive quality gains and improve overall efficiency.

Further, Irwin believes that FCEL will book the $500m Beacon Falls project in the next few months. Irwin revealed the partially complete 1.4MW plant slated for delivery to Riverside, CA and had not yet “appreciated the incremental value FCEL will capture” also supplying the biogas cleanup skid. Irwin believes that management is optimistic about the potential of carbon capture, where one can see the recent XOM technology agreement as validation. Irwin believes the company expects material bookings from this market over the next couple of years.

According to TipRanks, analyst Craig Irwin has a yearly average loss of 10.7% and a 30% success rate. Irwin is ranked #3732 out of 3910 analysts.

As of this writing, the 2 analysts polled by TipRanks are bullish on FuelCell stock. The stock’s consensus target price is $10.10, marking a potential upside of 66.40%.


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