Lending Club (LC) Price Target Raised to $31 at BTIG

BTIG maintained a Buy rating on Lending Club (NYSE: LC) and raised its price target to $31.00 (from $19.00).

Analyst Mark Palmer said, "We observed that during the company's pre-IPO ventureround capital raises, its valuation was consistently between 0.8x and 0.9x its total origination figure. Even the $15 price at which LC went public translated into a market capitalization of $5.4bn, or 0.87x its approximately $6.2bn of loan originations at the time of the offering, giving support to the use of a multiple of total originations as a consistent valuation methodology for the company."

"We acknowledge that we were overly conservative with our initial price target on LC, which was based on a 15x multiple of its FY18E adjusted EBITDA, and we believe a significant premium valuation is warranted given the company╆s remarkable growth potential. As consumer awareness of the benefits of LC versus traditional banks becomes widespread, we believe a consumer preference shift is likely to occur that would be akin to previous shifts such as those from traditional booksellers like Borders to Amazon and from video rental firms like Blockbuster to Netflix. As in those two examples, the early adopters of LC are likely to be joined by a large portion of the mainstream market over time," he added.

For an analyst ratings summary and ratings history on Lending Club click here. For more ratings news on Lending Club click here.

Shares of Lending Club closed at $24.69 yesterday.

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