Morgan Stanley Optimistic on Affirm's Future Prospects
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: CNBC
- Upward Growth Revisions: Morgan Stanley has named Affirm as its top pick, projecting upward revisions to growth estimates with a price target of $76, indicating a 26% upside from Thursday's close, reflecting strong market confidence in its future performance.
- Investor Day Catalyst: Affirm is set to hold its Investor Day in May, which is expected to raise targets for gross merchandise value (GMV), margins, and earnings per share (EPS), further enhancing market expectations for its growth potential.
- Overblown Market Fears: While investors have expressed concerns about Affirm's links to private credit, Morgan Stanley believes these fears are exaggerated, as Affirm's asset-backed securities (ABS) spreads remain stable, indicating strong forward demand.
- Attractive Valuation: Morgan Stanley highlights that Affirm's valuation remains compelling, with expectations to raise several estimates linked to its financial outlook, driving up shares in line with Wall Street consensus, where 23 out of 31 analysts rate the stock as a buy or strong buy.
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Analyst Views on AFRM
Wall Street analysts forecast AFRM stock price to rise
22 Analyst Rating
17 Buy
5 Hold
0 Sell
Strong Buy
Current: 60.280
Low
65.00
Averages
87.72
High
107.00
Current: 60.280
Low
65.00
Averages
87.72
High
107.00
About AFRM
Affirm Holdings, Inc. provides consumers with an alternative to traditional payment options. The Company is engaged in building a payment network. Its platform comprises three core elements: point-of-sale payment solutions for consumers, merchant commerce solutions, and a consumer-focused app. Its Affirm App and Website provide tailored offers from merchants based on consumers' preferences. Consumers can apply at affirm.com or via the Affirm App and, upon approval, receive a single-use virtual card to use online or in-store. Its Affirm Card allows consumers to link a bank account to pay in full, or apply to pay overtime through the Affirm App. It offers users an in-app post-purchase feature that allows them to instantly apply to convert any eligible debit transaction into an installment loan. Through the Affirm app and in partnership with Cross River Bank, it offers a savings account, with no minimum deposit requirements or fees.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- High Strike Activity: Notably, the $110 strike call option expiring on April 17, 2026, saw 26,772 contracts traded today, representing about 2.7 million underlying shares, suggesting a heightened investor expectation for future price increases.
- Affirm Holdings Options Activity: In parallel, Affirm Holdings Inc (AFRM) has seen an options trading volume of 49,241 contracts today, translating to approximately 4.9 million shares, which is 101.9% of its average daily trading volume over the past month, reflecting ongoing market interest in the company.
- Bullish Call Trends: Specifically, the $75 strike call option expiring on May 15, 2026, has recorded a trading volume of 6,111 contracts today, equivalent to about 611,100 shares, indicating a bullish sentiment among investors regarding AFRM's future performance.
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- Sentiment Shift: Driven by high message volume, retail sentiment around Affirm shifted from ‘bullish’ to ‘extremely bullish’, reflecting investor optimism about its future performance, with the stock rising over 6% on Friday afternoon.
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- Upward Growth Revisions: Morgan Stanley has named Affirm as its top pick, projecting upward revisions to growth estimates with a price target of $76, indicating a 26% upside from Thursday's close, reflecting strong market confidence in its future performance.
- Investor Day Catalyst: Affirm is set to hold its Investor Day in May, which is expected to raise targets for gross merchandise value (GMV), margins, and earnings per share (EPS), further enhancing market expectations for its growth potential.
- Overblown Market Fears: While investors have expressed concerns about Affirm's links to private credit, Morgan Stanley believes these fears are exaggerated, as Affirm's asset-backed securities (ABS) spreads remain stable, indicating strong forward demand.
- Attractive Valuation: Morgan Stanley highlights that Affirm's valuation remains compelling, with expectations to raise several estimates linked to its financial outlook, driving up shares in line with Wall Street consensus, where 23 out of 31 analysts rate the stock as a buy or strong buy.
See More
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- High Strike Activity: Notably, the $110 strike call option expiring on April 17, 2026, saw 26,772 contracts traded today, representing about 2.7 million underlying shares, suggesting a heightened investor expectation for future price increases.
- Affirm Holdings Options Activity: In parallel, Affirm Holdings Inc (AFRM) has seen an options trading volume of 49,241 contracts today, translating to approximately 4.9 million shares, which is 101.9% of its average daily trading volume over the past month, reflecting ongoing market interest in the company.
- Bullish Call Trends: Specifically, the $75 strike call option expiring on May 15, 2026, has recorded a trading volume of 6,111 contracts today, equivalent to about 611,100 shares, indicating a bullish sentiment among investors regarding AFRM's future performance.
See More
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- Earnings Guidance Revisions: Morgan Stanley anticipates that Affirm will update its projections for gross merchandise volume, profitability, and earnings per share at the upcoming Investor Forum, potentially boosting market confidence in its future growth trajectory.
- Price Target Increase: The firm reiterated its ‘Overweight’ rating on Affirm and set a price target of $76, implying a 26% upside from Thursday's closing price, indicating strong bullish sentiment towards the stock.
- Sentiment Shift: Driven by high message volume, retail sentiment around Affirm shifted from ‘bullish’ to ‘extremely bullish’, reflecting investor optimism about its future performance, with the stock rising over 6% on Friday afternoon.
- Credit Concerns Overstated: Despite heightened market anxiety regarding private credit exposure, Morgan Stanley believes these fears are exaggerated, as stable asset-backed securities spreads indicate healthy demand and continued access to funding in capital markets.
See More
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- Market Surge: The stock market surged on Friday after Iran announced the Strait of Hormuz is open to all commercial traffic, leading to a 14% drop in oil prices, with WTI trading above $80 per barrel, reflecting optimism about economic recovery.
- Transportation and Industrials Rally: Lower oil prices lifted transportation and industrial stocks, with Boeing shares rising over 3% and both Honeywell and GE Vernova increasing by 2%, indicating a resurgence of confidence in these sectors.
- Apple's Recognition: Bank of America analysts named Apple a 'high-quality' stock, noting its resilience against AI volatility and progress in on-device AI capabilities, suggesting investors will refocus on Apple's strong sales in China.
- Trade Alert Mechanism: Subscribers to the CNBC Investing Club receive trade alerts before Jim executes trades, with a 45-minute wait period post-alert to ensure transparency and strategic execution.
See More
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- Energy Stocks Plummet: Energy stocks fell sharply as oil prices dropped over 12% after Iran opened the Strait of Hormuz during the ceasefire between Israel and Lebanon, with APA Corporation down more than 9% and Valero Energy falling over 8.5%, negatively impacting overall confidence in the energy sector.
- Travel Stocks Rally: Following Iran's announcement to open the Strait of Hormuz for commercial shipping, Royal Caribbean surged 9.7%, United Airlines jumped over 9%, and Expedia gained 5%, reflecting optimistic market sentiment regarding travel recovery.
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- Stock Surge: Affirm Holdings (AFRM) stock surged 8.6% in Friday morning trading, primarily driven by Morgan Stanley naming it a top pick in the consumer finance sector, reflecting market confidence in its future performance.
- Market Environment Improvement: News of Iran opening the Strait of Hormuz may buoy fintech and consumer finance stocks, as lower gasoline prices could free up cash for consumers, enhancing their confidence to spend and borrow.
- Analyst Rating: Morgan Stanley analyst James Faucette assigned an overweight rating to Affirm (AFRM), citing prospects for upward earnings estimate revisions and easing private credit fears, indicating a particularly attractive investment setup for the next six months.
- Industry Trends: Other fintech stocks rising alongside Affirm include Robinhood (+6.3%), SoFi (+5.3%), and LendingClub (+5.8%), suggesting a growing optimism across the entire sector as market conditions improve.
See More
Morgan Stanley Optimistic on Affirm's Future Prospects
- Upward Growth Revisions: Morgan Stanley has named Affirm as its top pick, projecting upward revisions to growth estimates with a price target of $76, indicating a 26% upside from Thursday's close, reflecting strong market confidence in its future performance.
- Investor Day Catalyst: Affirm is set to hold its Investor Day in May, which is expected to raise targets for gross merchandise value (GMV), margins, and earnings per share (EPS), further enhancing market expectations for its growth potential.
- Overblown Market Fears: While investors have expressed concerns about Affirm's links to private credit, Morgan Stanley believes these fears are exaggerated, as Affirm's asset-backed securities (ABS) spreads remain stable, indicating strong forward demand.
- Attractive Valuation: Morgan Stanley highlights that Affirm's valuation remains compelling, with expectations to raise several estimates linked to its financial outlook, driving up shares in line with Wall Street consensus, where 23 out of 31 analysts rate the stock as a buy or strong buy.
See More
