Oppenheimer & Co. analyst Jed Kelly upgraded LendingClub Corp. to "outperform" from "perform," writing that the company is using what he called a strong balance sheet to develop a "potentially large securitization channel."
The analyst noted that the company's first securitization was oversubscribed, indicating high demand. "We see securitizations as an opportunity to extract more value from investors," he wrote.
And while Social Finance and Goldman Sachs' Marcus lending platform are legitimate competitors, LendingClub generates twice the amount of user traffic as its closest peer, Kelly added.
Kelly's price target for the company is $7.00. He raised his non-GAAP EPS estimates on LendingClub to 4 cents from 3 cents for 2017 and to 20 cents from 18 cents for 2018.