- LexinFintech Holdings (NASDAQ:LX) stock gains 2.4% in after-hours trading after Morgan Stanley analyst Richard Xu upgrades the stock to Overweight from Equal Weight as he sees reduced regulatory uncertainties for Chinese online lenders.
- Also cites improved credit quality on economic recovery and better household leverage containment via regulatory efforts.
- Sees healthy loan volume growth of 30%-40% for LX and for its peer 360 DigiTech (NASDAQ:QFIN) and stable pricing.
- On April 29, Chinese financial regulators held talks with 13 major internet platforms with financial operations and communicated the authorities' focus on implementation and enforcement of existing regulations.
- For LX, Xu lifts 2021 profit forecast by 9.9% and 2022 profit forecast by 10%; for QFIN, increases profit forecast for 2021 by 7.8% and by 8.6% for 2022.
- Xu's Overweight rating compares with the Very Bullish Quant rating and the average Wall Street rating of Very Bullish (9 Very Bullish, 3 Bullish, 1 Neutral).
- Early this month, LX stock gained after reporting strong revenue growth, driven by credit-oriented services income.