Wolfe Research upgrades Robinhood to $125 price target: 50% potential upside

Investing.com -- Robinhood Markets (NASDAQ: HOOD) stock rose 2.7% Monday morning, outperforming broader markets that were down slightly and crypto-linked stocks that fell over 2%, following an upgrade from Wolfe Research.

Analyst Steven Chubak upgraded Robinhood from Peerperform to Outperform and set a price target of $125.00, representing significant upside from Friday’s closing price of $82.80. The upgrade comes as the analyst looks to "take advantage of the recent selloff and deterioration in sentiment surrounding the broader crypto ecosystem."

Chubak noted that Robinhood shares have largely retraced to the same price level where he downgraded the stock a year ago, despite increased earnings power from new offerings like Prediction Markets, expanded international footprint, and a more robust product lineup.

The analyst highlighted that estimate revisions for Robinhood have significantly outpaced peers. While declining crypto volumes are expected to be a headwind for fourth-quarter earnings, Chubak still sees upside to consensus estimates due to positive surprises from prediction markets and better retail engagement across options, equities, and margin.

Looking ahead, Wolfe Research expects continued growth in prediction markets, though notes this segment could face challenges from state-imposed restrictions and competitive fee pressure among peers over the long term.

The positive analyst sentiment comes at a time when many crypto-related stocks are facing pressure, making Robinhood’s relative strength in Monday’s trading particularly notable.

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