Affirm Holdings’ (AFRM) shares are cooking up another rally and are up roughly 6% early Friday. This came after banking giant Morgan Stanley (MS) named the U.S. fintech company its top pick and called recent private credit fears “overdone.”
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Besides a modest 1% gain on Thursday, Affirm’s shares have ended each trading day roughly 7% higher since Monday, April 13. On Friday, Morgan Stanley’s James Faucette triggered another rally when he reaffirmed his Buy rating on the buy-now, pay-later company, setting a price target of $76, which implies about 26% upside.
Morgan Stanley Downplays Private Credit Tumult
As a fintech company, Affirm operates a platform that offers point-of-sale payment solutions to a wide range of customers across different sectors, from small businesses to large enterprises. It also provides loan arrangement services through its bank partnerships.
However, Affirm and other fintech stocks came under pressure last month as investors grew anxious that the dumping of private credit funds over lending to the beleaguered software industry might spill over into the fintech sector. This followed a surge in redemption requests at Stone Ridge Asset Management’s Alternative Lending Risk Premium Fund, which forced the U.S. alternative asset manager to cap withdrawals at 11%.
Affirm Approaches ‘A Major Catalyst’
However, Faucette remains bullish on Affirm and believes the company’s upcoming investor forum in May “could be a major catalyst” for the stock. The analyst sees the possibility of Affirm raising its gross merchandise volume, profit margin, and earnings per share targets.
Meanwhile, Affirm shares surged on Tuesday after Citi analyst Bryan Keane added AFRM stock to his “upside 90-day catalyst watch,” meaning that he sees a good chance the stock could experience positive price movements over the next three months.
Keane also raised his price target on Affirm by a whopping 79% to $100, predicting roughly 66% upside.
Is Affirm a Good Stock to Buy?
Across Wall Street, Affirm Holdings’ shares continue to enjoy a Strong Buy consensus rating from analysts. This is based on 17 Buys and five Holds issued by 22 analysts over the past three months.
In addition, the average AFRM price target of $82.30 suggests more than 31% upside from current trading levels.
