Jefferies initiated coverage of LendingClub (NYSE:LC) with a Buy rating and price target of $13.50 per share in a note Friday.
Analysts told investors that there are lots of catalysts for the company to expand its return on equity.
"LC is an early mover in the Fintech space with a deep operating history, bank charter, and a tech-enabled lending platform," analysts wrote. "We believe ROE will likely bottom in mid '23 and provide several catalysts herein that should lead to a higher ROE and valuation."
They also pointed to competitive advantages tied to the bank charter as well as the company's diversified growth strategy going forward.
"LC serves an attractive customer profile base and the macro backdrop may lead to a rise in consumer loan demand," said analysts. "We believe LC's consumer demand will likely remain high given the current conditions, thus supporting LC's growth. As detailed herein, we also see a revival of marketplace activity which will support fee revenue growth — a high-margin, capital-efficient source of revenues at LC."