UBS Raises Price Target on LexinFintech Holdings (LX) to $13.60 from $9.60, Maintains Buy Rating

UBS raised the price target on LexinFintech Holdings Ltd. (NASDAQ:LX) to $13.60 from $9.60, keeping a Buy rating on the shares. The analyst is confident in the company's turnaround trajectory in 2025 after Q4 2024 results, which showed a notable 113% YoY growth in net income to RMB430 million. LexinFintech Holdings Ltd. leverages its proprietary platform to match consumers with credit card needs to financial institution partners.

UBS has raised the price target on LexinFintech Holdings Ltd. (NASDAQ: LX) to $13.60 from $9.60, maintaining a Buy rating on the shares. The upgrade comes after the company reported a notable 113% year-over-year (YoY) growth in net income to RMB 430 million in the fourth quarter of 2024. The analyst is optimistic about LexinFintech's turnaround trajectory in 2025, driven by the company's strategic shift towards a capital-light, high-margin business model [2].

LexinFintech's proprietary platform, Fenqile, integrates consumer financing with e-commerce, enabling the company to generate loans within specific consumer situations. This model reduces credit risk and provides valuable data for risk management systems, enhancing operational efficiency and profitability. The company's strategic investments in AI and big data technology are further fortifying its financial stability and revenue streams [2].

The analyst's confidence in LexinFintech's turnaround trajectory is bolstered by the company's recent financial performance. Despite facing a challenging environment, LexinFintech has managed to increase its profitability, improve its asset quality, and demonstrate a commitment to increasing dividends for shareholders. The company's pivot to a capital-light, technology-driven service provider has resulted in a more predictable revenue mix, with fee-based revenue streams growing in importance [2].

LexinFintech's strategic transition aligns with China's evolving and stricter fintech regulations, which favor technology platforms that empower conventional financial institutions rather than competing as "shadow banks." This regulatory alignment is crucial for the company's long-term survival and growth prospects [2].

In conclusion, UBS's upgrade to a Buy rating and a new price target of $13.60 reflects the analyst's confidence in LexinFintech's turnaround trajectory and strategic pivot. The company's strong financial performance, innovative business model, and alignment with regulatory trends make it an appealing investment opportunity for investors and financial professionals.

References:
[1] https://stockinvest.us/stock/LX
[2] https://seekingalpha.com/article/4800255-lexinfintech-an-evolving-deep-value-fintech