J.P. Morgan analyst Reginald Smith has maintained their neutral stance on SOFI stock, giving a Hold rating on July 8.
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Reginald Smith has given his Hold rating due to a combination of factors surrounding SoFi Technologies. The recent legislative changes, specifically the One Big Beautiful Bill Act (OBBBA), present a significant opportunity for private student loan lenders like SoFi. The elimination of the Grad PLUS program and restrictions on federal borrowing could potentially increase the demand for private loans, offering SoFi a substantial revenue opportunity. However, not all of the potential $14 billion in annual loan volume may be accessible to private lenders, and increased limits on unsubsidized loans for certain professional students could slightly reduce demand.
Despite these opportunities, Smith remains cautious due to the uncertain economic environment, particularly concerning inflation and interest rates in the coming years. While SoFi’s strategic positioning and potential for non-interest income growth are promising, the valuation of the company remains complex due to its diverse business model. Smith’s Hold rating reflects a balanced view of the potential benefits from the legislative changes against the backdrop of broader economic uncertainties and the current market valuation of SoFi’s shares.
Smith covers the Financial sector, focusing on stocks such as Riot Platforms, Marathon Digital Holdings, and Cleanspark. According to TipRanks, Smith has an average return of 11.4% and a 52.04% success rate on recommended stocks.
In another report released on July 8, Barclays also maintained a Hold rating on the stock with a $18.00 price target.