Morgan Stanley upgrades Robinhood stock rating on product expansion

Morgan Stanley has upgraded Robinhood Markets' stock rating to Overweight from Equalweight, raising its price target to $150.00 from $124.00. The company's stock is currently trading at $104.81, with a market capitalization of $94.2 billion. Morgan Stanley believes that Robinhood's expanding product offerings are enhancing the economics of its existing customer base, leading to more assets, activity, and higher revenue per customer.

The firm sees multiple revenue-generating opportunities for Robinhood, as customers increasingly utilize a wider array of financial products rather than just funded accounts. Robinhood's platform now boasts 13 business lines generating at least $100 million in annualized revenue, with newer ventures such as retirement, banking, credit card, advisory, and prediction markets continuing to expand.

Despite the stock appearing overvalued at current levels, Morgan Stanley remains optimistic about Robinhood's growth potential and overall outlook.