SOFI share: analyst call gives SoFi Technologies investors something to smile about today

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The fall season brought a lot of turbulence to the markets in many sectors. Through it all, however, some companies have managed to stay mostly in the green, constantly recovering from sudden and random downturns. One company we have seen this is the fintech personal finance tool Sofi Technologies (NASDAQ:SOFI), who was floated on the stock market in early June 2021 following a SPAC (Société d’Acquisition Spéciale) merger. Since then he has seen quite a bit of turmoil but never stayed for long. That may be about to change, however. A recent Morgan Stanley report set a high price target and drew attention to two major catalysts the company has ahead. As a result, SOFI stock is having a good morning.

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What is happening with SOFI Stock

For Sofi, this week started with Morgan Stanley analyst Betsy Graseck, who launched a cover with an overweight rating, indicating that she considered the stock to be good value for its current price. It also issued a price target of $ 25 for SOFI stock, a gain of approximately 54% from the stock’s closing price the Friday night prior to market close.

As you would expect in such a scenario, the SOFI title was quick to react well to this news. As of this writing, it is up 8.42% for the day. Although it’s still early days, it looks like it’s still climbing. This follows a strong previous week, in which the stock climbed nearly 9% with gains of over 17% for the month. The stock isn’t where it was in June, when it traded near $ 23 per share, but its trajectory throughout the fall has been on the uptrend overall.

Big things ahead

In his report, Graseck highlighted two major catalysts that await Sofi in the coming year. One of the company’s main jobs is that of refinancing student loans. Although this has been largely suspended throughout this year due to government withholdings from payment requirements, 2022 will see this change. As the report says, “Why choose a lower rate when you don’t have to pay anything at all during the deferral and just earn interest on your federal loan?” In February 2022, everything changes.

The second factor to consider, according to Graseck, is that of SoFi’s bank charter application. The company applied last year and received some approval. Although there are still some steps to be taken, analysts would not present it as a reason for growth if the finalization of the agreement was not expected in the coming year. In March 2021, Sofi announced its acquisition of Golden Pacific community bank in a clear move to help secure their banking status.

What this means

Although the report acknowledges that competition is increasing within the SoFi industry, it notes that SoFi has “a head start given its roots in the most difficult part of consumer credit, lending, as well as a robust digital offer ”. Essentially, she sees the company as a market leader among FinTech companies.

SoFi is certainly a household name in its industry, especially in the area of ​​student loan financing and refinancing. Grasseck is right that he has a lot of growth potential throughout the year. For many, student loan repayments will resume and refinancing will become a priority.

Besides, Investor place ”s Mark R. Hake notes that a recent convertible offer of $ 1.1 billion should be seen as a “bullish sign for the stock.”

At the end of the year, there are many reasons to watch SOFI stocks. Even if it does not meet Graseck’s price target, it is likely to come close and deliver significant returns for investors.

At the date of publication, Samuel O’Brient had (directly or indirectly) no position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publication guidelines.


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