On Tuesday, Deutsche Bank adjusted its price target on SoFi Technologies (NASDAQ:SOFI) shares, decreasing it to $11.00 from the previous $12.00. The firm retained its Hold rating on the stock.
The adjustment comes as the analyst acknowledges the fundamental undervaluation of the shares but also notes the current volatility and negative sentiment surrounding the stock.
The bank's analyst pointed out the challenges in predicting the stock's short-term performance due to its volatility. The market's current view of the company does not seem to favor a significant upward movement in the share price. The analyst highlighted the difficulty in finding a catalyst that would cause the stock to align with the 18.5x P/E ratio indicated by comparable companies.
Despite recognizing the potential value in SoFi Technologies' shares, the analyst expressed a cautious stance. The current market conditions, including the stock's volatility and the overall sentiment, were cited as reasons for maintaining the Hold rating. The analyst believes that the risk-reward profile for SoFi Technologies is relatively balanced at this time.
In conclusion, while Deutsche Bank sees SoFi Technologies as undervalued, the firm advises a cautious approach due to the lack of short-term catalysts and ongoing market volatility. The Hold rating remains in place as the bank awaits more definitive signs of a positive shift in the stock's valuation.
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