SoFi (NASDAQ:SOFI) is well in the red today after a number of analysts issued lower ratings on the fintech company. Indeed, SOFI stock is down 7% heading into the afternoon following some scathing remarks from Bank of America and Piper Sandler analysts.
What’s going on with SoFi lately?
Well, despite the general wave of optimism surrounding the company as it eyes profitability later this year alongside the end of the student loan moratorium, not everyone is convinced. This includes BofA analyst Mihir Bhatia, who recently expressed doubt over the company’s outward gains this year:
“SoFi Technologies (SOFI) shares are up 100% over the past month vs. a 7% increase in the S&P 500, mainly because the debt deal brought certainty that the Federal Student Loan payment moratorium would end in September.”
According to Bhatia, SoFi’s student loan payment benefit has already largely been priced in. Bhatia downgraded SOFI stock to “neutral” from “buy.” Interestingly, though, the analyst also raised their price target to $10 per share from $9.50.
Piper Sandler Analyst Downgrades SOFI Stock on Elevated Interest Rates
Unfortunately for the fintech company, BofA isn’t the only one taking issue with SoFi’s recent positivity streak. Indeed, according to Piper Sandler analyst Kevin Barker, its historic run-up this year is far beyond the realm of reasonability.
Barker downgraded SOFI stock to “neutral” from “overweight.” However, just like BofA, the analyst actually raised the price target on shares to $8 from $6.50.
Barker said the following about SoFi:
“The change in our rating is primarily due to valuation. SOFI is up 107% YTD compared to consumer lending peers +15% on average and a basket of fintech stocks down ~10%. We believe some outperformance is warranted, particularly if we were to see a significant decline in interest rates driving better margins and more attractive lending opportunities (i.e. student loans). However, we have seen rates actually move higher in the past two months, which will be an incremental headwind in the near-term, and we are increasingly concerned rates could remain higher for longer due to persistent inflation.”
After today’s analyst-induced losses, SoFi trades for about $8.80 per share as of this writing. SOFI is currently up more than 95% year-to-date (YTD).
On the date of publication, Shrey Dua did not hold (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.
