Affirm Holdings, Inc. (NASDAQ:AFRM) shares are trading higher after Wedbush analyst David J. Chiaverini upgraded the rating to Neutral (from Underperform) and raised the price target to $45 (from $25).
The analyst expects a lower interest rate environment to benefit the company through reduced funding costs and incremental GMV growth.
A 100 bp rate decline could improve RLTC margins by 40 bp in fiscal 2025, though the company may ease underwriting standards to maintain a 3%-4% RLTC margin, potentially boosting GMV, adds the analyst.
Chiaverini writes that the credit quality has consistently exceeded expectations in the higher rate environment, and he anticipates it will ...
