Robinhood (HOOD.US), one of the "biggest winners" of the election results, was significantly raised by Morgan Stanley.
1min read Robinhood Markets (HOOD.US) shares soared after a Morgan Stanley analyst significantly raised his price target, as he believes investor sentiment recovery and the Trump administration's friendly stance toward cryptocurrencies are key drivers for the company.
Robinhood's stock rose 3.27% to $37.85 on Monday, according to Dow Jones Market Data, and is on track to deliver its best month ever this month. Morgan Stanley analyst Michael Cyprys raised his rating from "Equal Weight" to "Overweight" and raised his price target to $55 from $24.
Cyprys said Robinhood was one of the "biggest beneficiaries" of the election results among the companies covered by Morgan Stanley. He praised the company's recent decision to acquire TradePMR, a custodian and portfolio management platform, which would expand Robinhood's potential market.
Cyprys noted that the acquisition was one of several key long-term developments for Robinhood, with significant long-term flexibility. Morgan Stanley expects Robinhood's revenue to grow at a 15% compound annual growth rate until 2027.
Moreover, Robinhood's investor day event scheduled for December 4 is expected to boost confidence in its growth prospects and attract more investors to buy its stock.
Despite Robinhood's more than 100% year-to-date gain, Morgan Stanley believes there is further upside. Cyprys noted that Robinhood's current valuation is low and it is moving faster to launch new initiatives, while investor enthusiasm after the election will also provide more opportunities.
Cyprys wrote in the report: "Looking to 2025, a rebound in IPO and M&A activity may further drive retail investor participation and trading activity, while a more favorable digital asset regulatory environment may allow Robinhood to capitalize on this opportunity more aggressively."
Not only Morgan Stanley, other institutions are also bullish on Robinhood's stock. Last week, Needham analyst John Todaro raised his rating from "Hold" to "Buy" and raised his price target to $40 from $33.
With the market sentiment continuing to improve, Robinhood's future growth potential is worth looking forward to.