Needham upgraded HOOD to "buy" with a new $40 price target
Robinhood Markets Inc (NASDAQ:HOOD) stock is up 4.8% ahead of the open, after Needham upgraded the brokerage platform to "buy" from "hold" and set its price target at $40. The brokerage platform also announced an agreement to acquire TradePMR for approximately $300 million, a move it hopes will increase its investment advisory capabilities.
The analyst in coverage noted Robinhood could benefit from new crypto-friendly leadership at the U.S. Securities and Exchange Commission (SEC) after the election. Robinhood has expanded its offering of cryptocurrencies, appealing to its core base of younger, retail investors.
On the charts, HOOD yesterday closed at $35.24 -- its highest finish since November 2021. The shares look headed for a fifth-straight win today, and have staged a nice bounce off their 80-day moving average. Longer term, shares sport a 333.5% year-over-year gain.
Despite the stock's 176.6% year-to-date lead, eight of 17 covering brokerages recommend a tepid "hold" or worse, and its 12-month average target price of $30.35 is an 18.4% discount to last night's close. An overdue round of upgrades could keep the wind at the equity's back.
It's worth noting that the stock's Schaeffer's Volatility Scorecard (SVS) of 85 out of 100 implies a tendency to outperform volatility expectations -- an boon for premium players.