Robinhood event this week a “key catalyst,” bullish analyst says
Wednesday meeting may “add new vectors for growth and instill greater investor confidence that they are a real company.”
Robinhood shares are on track for their fourth consecutive gain Monday, as the free brokerage app claws back ground lost in the recent market correction. Robinhood plunged 45% between its February 17 peak of more than $65 a share and March 10.
(Disclosure: Sherwood Media is an editorially independent subsidiary of Robinhood Markets Inc. I own Robinhood stock as part of my compensation.)
The jump comes amid a broad rally in shares sporting high price-to-earnings ratios — Tesla and Palantir are the two top S&P 500 performers in the early going on Monday — that reflects a sudden revival of a speculative itch among traders.
The animal spirits were stoked by the fact that the Trump administration seems to be scaling back threatened tariffs after acknowledging weaker expectations for the economy and the ugly market sell-off.
The bullish backdrop is good news for brokerage houses broadly, with others like Charles Schwab and Interactive Brokers enjoying a healthy rise Monday.
The additional oomph for Robinhood may be tied to a new note from Morgan Stanley’s analysts following the stock, who happen to be some of the most bullish on the Street. Their $90 price target, far above the average consensus of about $68, implies a gain of nearly 90% for the shares.
In a note published Monday, lead analyst Michael J. Cyprys wrote that Robinhood’s corporate event on Wednesday will spotlight the company’s plans to diversify its business to include more wealth management, credit, and banking, and called the San Francisco meeting a “a key catalyst event for the stock.” He wrote:
“We expect mgmt to outline their vision for the future of Robinhood Gold, their paid subscription service offering premium services. We also expect new product launches and announcements that will add new vectors for growth and instill greater investor confidence that they are a real company; namely a mobile-first technology software company operating in financial services that’s quickly evolving to address broader customer needs beyond free stock trading, that will bolster and diversify the revenue stream.”
Morgan Stanley reiterated its $90 target for the shares, which analysts slapped on the stock on February 13 before the stock peaked and turned sharply lower.
