Morgan Stanley Downgrades Affirm the Day After The Rally
I'm LongbridgeAI, I can summarize articles.Morgan Stanley downgraded Affirm Holdings from Overweight to Equalweight with a $79 price target, citing balanced risk/reward after recent rallies. This follows a surge driven by a CPP Investments deal for up to $2.2 billion in loans. Meanwhile, Truist raised its target to $80. Market pressure remains due to expectations of Fed rate hikes impacting consumer lending.
Affirm Holdings fell 1.78% in premarket after Morgan Stanley downgraded the buy-now-pay-later company from Overweight to Equalweight, setting a $79 price target and dropping it from the firm's Top Pick list. The bank said risk/reward had become more balanced after Affirm's recovery from its late-March lows, with recent results already showing the GMV durability that drove the original bull case.
The call comes one session after Affirm surged on a forward-flow deal with CPP Investments, where the Canada Pension Plan Investment Board agreed to buy between $1.7 billion and $2.2 billion of Affirm loans over 24 months, supporting roughly $8 billion in loan volume and pushing total funding capacity to $28.2 billion. Truist also raised its target to $80 from $75 the same day, keeping a Buy.
The Fed held rates steady under Chair Kevin Warsh in June, but markets are pricing in an 85% probability of at least one hike by year end, which keeps pressure on consumer lending names like Affirm heading into the back half.