Upstart Holdings Inc (NASDAQ:UPST) shares are trading lower following bearish analyst coverage from Morgan Stanley.
Morgan Stanley analyst James Faucette downgraded Upstart from an Equal-Weight rating to Underweight and slashed the price target to $19 from $88, citing deteriorating relative underwriting performance and increasing required returns from institutional partners as headwinds.
Faucette noted that rising interest rates and normalizing credit performance have contributed to the increased required return demand from institutional investors. He expects such to lead to higher APRs on Upstart's platform, which is likely to impact demand.
As a result, risks to estimates are skewed to the downside, Faucette said. Furthermore, the Morgan Stanley analyst expects Upstart's valuation to reflect a more cyclical growth trajectory moving forward.
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UPST Price Action: Upstart has traded between $401.48 and $25.43 over a 52-week period.
The stock was down 8.55% at $32.61 at press time, according to data from Benzinga Pro.
Photo: courtesy of Upstart.
