LendingClub (NYSE:LC) shares rose more than 4% intra-day today after Piper Sandler analysts increased their price target for the stock to $20 from $15, reaffirming an Overweight rating. This revision reflects optimism around improved loan sale pricing and a stronger earnings trajectory, making LendingClub a top pick for 2025 in financial services.
While maintaining the fourth-quarter 2024 operating EPS estimate at $0.09, the analysts raised projections for fiscal 2025 EPS to $0.90 from $0.88 and for fiscal 2026 to $1.35 from $1.32. These adjustments incorporate better-than-expected loan sale prices observed in the third quarter of 2024, as bank buyers began re-engaging. Despite this improvement, current loan sale prices remain below historical averages, suggesting further upside potential.
The updated price target is based on LendingClub’s fiscal 2026 core earnings multiple, advancing the valuation timeline by a year from the previous 2025 model. This adjustment also accounts for normalized provisions reduced to 370 basis points, down from 390 bps, reflecting improving credit performance. Additionally, the required return assumption was lowered to 10% from 10.5%, given the company’s enhanced earnings outlook and the inclusion of estimated excess capital.