City downgraded Robinhood to neutral
2022.12.13 12:19
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City downgraded Robinhood to neutral
Budrigannews.com – Robinhood (NASDAQ:) brokerage’s rating was downgraded by Citi. in a note to clients on Tuesday, it changed its rating from Buy to Neutral and cut its price target for the stock from $11 to $10 per share.
Citi sees a “mixed outlook from here given potential headline risk from upcoming SEC market structure proposals, a cautious equity market outlook, and potential fallout from FTX impacting crypto trading revenues and the customer base,” analysts told investors.
Despite Robinhood’s “a lot to right its ship recently,” which included materially lowering the cost base, improving active trader offerings, and rolling out attractive products, Citi sees a “mixed outlook from here given potential headline risk from upcoming SEC market They stated, ” Regarding the FTX fallout The ongoing fallout from the collapse of FTX could have a number of effects on HOOD, including: 1) expected liquidation of 56.3M HOOD shares (7.4% of exceptional) claimed by Sam Bankman-Seared through Emanant Loyalty Innovations, yet unsure timing, 2) expulsion of FTX as a potential acquiror, and 3) lower crypto exchanging incomes given significant value declines and material decay in financial backer certainty.
More Reason for collapse FTX was named by new CEO
Additionally, we are concerned about how the price drops will affect the HOOD customer base, particularly active traders.
In addition, Citi anticipates a 50% or more decline in Robinhood’s crypto trading revenues in 2023, following a 50% decline in 2022. However, Citi sees a stable outlook for the brokerage’s equities business, albeit “little growth given a choppy market outlook.”
The analysts came to the following conclusion: “We are constructive on the longer-term outlook given HOOD’s solid balance sheet, monetization of account growth potential, and brand recognition; however, in the near term, see a balanced risk/reward.”
