By Sam Boughedda
Shares of Robinhood (NASDAQ:HOOD) were cut to Underweight from Equal Weight at Barclays on Wednesday, with its $10 per share price target maintained and maintained at Underweight by Atlantic Equities, with its price target raised to $7 from $5.
Starting with Atlantic Equities, an analyst said in a note to clients that while Robinhood's key trends remained negative in July, the Fed's assertion of a more hawkish approach to taming inflation positively impacted their NII forecasts.
"MAU declined a further 0.8m MoM to 13.2m, but trading volumes were only modestly negative MoM and were slightly positive on an average daily basis. Assets Under Custody also rose given the rebound in equity markets during the month," wrote the analyst. "We have also lowered our expense forecasts, in line with recent guidance. The net impact is to lower our forecast adj. EBITDA loss for FY22 and we now forecast a positive adj. EBITDA for FY23. However, given substantial uncertainty regarding transactional revenues, particularly in crypto, we retain our Underweight rating."
Meanwhile, a Barclays analyst said in a broad note on brokers and exchanges that while Robinhood should benefit from improving markets, rising rates, and the upcoming product rollout cycle, its customer base is "likely to be more negatively affected by inflation and/or a potential recession."
In addition, the analyst said they think it will "take some time before the current product pipeline translates to a more engaged customer base."