Upstart (NASDAQ:UPST) stock is taking a beating on Wednesday after Morgan Stanley analyst James Faucette hit the shares with a downgrade.
That downgrade saw Faucette drop shares of UPST stock from an “equal weight” rating to an “underweight” rating. To put that in perspective, the current consensus rating for the stock is “hold.” That comes from three “buy” ratings, seven “hold” ratings, and three “sell” ratings.
To go along with the downgrade, the Morgan Stanley analyst also cut their price target for UPST stock. This has the price prediction dropped from $88 per share to only $19 per share. That represents a potential 47% downside from yesterday’s close. It’s also nowhere close to the analysts’ consensus price target of $92.46 for the stock.
So what has Faucette taking such a bearish stance on UPST stock? Here’s what the analyst said in a note to clients obtained by Investing.com:
Deteriorating relative underwriting performance and increasing required returns from institutional partners have shifted our view incrementally negative, and we see downside risk to estimates and valuation as the platform’s cyclicality is tested.
The downgrade today isn’t inspiring heavy trading of UPST stock just yet. As of this writing, over 4 million shares have changed hands. That’s still a ways off from its daily average trading volume of about 10.8 million shares.
UPST stock is down 10% as of Wednesday morning. The stock is also down 77.7% since the start of the year.
Investors seeking out more recent stock market news are in the right place!
InvestorPlace has all the latest stock news that traders need to know about! For Wednesday, that includes what’s happening with shares of Bed Bath & Beyond (NASDAQ:BBBY), Beyond Air (NASDAQ:XAIR), and Pinterest (NYSE:PINS) stock. You can find more on those subjects at the following links!
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.