Wall Street investment bank Jefferies Financial Group (JEF) has initiated coverage of online brokerage Robinhood Markets (HOOD) with a Buy rating and $88 price target.
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The price target from Jefferies is 25% higher than where Hood stock currently trades. In a note to clients, Jefferies says that investors should buy shares of Robinhood as the company evolves into a broad financial services company with the upcoming launch of its super app.
Jefferies writes that Robinhood should benefit from rising global retail participation in markets and maintains a “unique ability to attract the next-gen investor.” The Wall Street firm adds that Robinhood could further benefit from a roughly $100 trillion generational wealth transfer expected in coming years.
HOOD Stock’s Attractive Entry Point
Down nearly 40% this year and trading at 26 times 2027 earnings estimate, Jefferies says that HOOD stock offers “an attractive entry point” to investors right now. The shares should rise as Robinhood grows its customer base and balance sheet, with funded customers reaching 27.4 million in February.
Lastly, Jefferies points to Robinhood’s product expansion and diversification, ranging from tokenization to custody, as drivers of future revenue growth. Robinhood Markets is expected to get a further boost from the launch of its upcoming super app that aims to be a one-stop application for a person’s banking and finances.
Is HOOD Stock a Buy?
Robinhood’s stock has a consensus Strong Buy rating among 17 Wall Street analysts. That rating is based on 15 Buy and two Hold recommendations issued in the last three months. The average HOOD price target of $120.07 implies nearly 70% upside from current levels.
