Chime Financial, Inc. Class A, the Financial sector company, was revisited by a Wall Street analyst today. Analyst James Faucette from Morgan Stanley maintained a Buy rating on the stock and has a $40.00 price target.
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James Faucette’s rating is based on the belief that Chime Financial, Inc. will not be significantly affected by the recent court ruling on debit interchange fees. The ruling, which vacated the Federal Reserve’s Regulation II, primarily impacts issuers with assets over $10 billion, while Chime’s bank partners remain exempt due to their asset size. This exemption allows Chime to maintain its current pricing model, which is crucial given that debit fees account for a substantial portion of its revenue.
Furthermore, the Federal Reserve has appealed the decision, indicating that any potential changes could take several years to materialize. Even if the ruling is upheld, the process of implementing new rules would be lengthy. Thus, Faucette believes that Chime’s current business model remains secure in the short to medium term, justifying the Buy rating.
According to TipRanks, Faucette is a 4-star analyst with an average return of 5.1% and a 63.41% success rate. Faucette covers the Technology sector, focusing on stocks such as Endava, Accenture, and Jack Henry & Associates.