SoFi Stock Pops as Bank of America Upgrades to Buy on Emerging Catalyst Path

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By Senad Karaahmetovic

Shares of SoFi Technologies Inc. (NASDAQ:SOFI) are trading 3% higher on Wednesday after a Bank of America analyst upgraded to Buy from Neutral with a $9 per share price target from $8.

The analyst sees an attractive valuation as SoFi trades at about 1.0x book value as of June 30.

“We see potential for a meaningful catalyst path over the next few quarters as SoFi benefits from the student loan payment moratorium ending and its high-profile NFL-aligned marketing investments drive user growth and engagement,” the analyst wrote in a client note.

In addition to the abovementioned factors, he also argues that the fintech company offers investors FinTech and consumer finance exposure without subprime risk, which is seen as “a key positive in a macro backdrop characterized by heightened uncertainty around the health of the consumer.”

SoFi is also likely to benefit from its NFL marketing campaign.

“Our analysis indicates interest in the SOFI brand inflects higher on Sundays, particularly when LA teams play home games. Member growth was also higher in 2H22 vs. 1H22 and our conversations suggest engagement also increases around football games,” the analyst added.

Net-net, the Bank of America analyst sees potential upside to 2022/23 estimates that could eventually propel SOFI shares higher.

SoFi shares closed at $5.84 on Tuesday.