Proactive Investors - Affirm gained almost 13% on Monday after the buy now, pay later firm was upgraded by Goldman Sachs Group Inc (NYSE:GS, ETR:GOS) analysts.
The analysts upgraded the stock from ‘Neutral’ to ‘Buy’ and doubled their price target from $21 to $42, representing a premium of more than 40% to Affirm’s closing price on Friday.
Affirm shares closed up 12.8% at $33.70 on Monday.
Goldman’s analysts believe Affirm has “a diverse portfolio of products for point of sale financing, and everyday spending” and a “strong track record of achieving well-managed credit outcomes despite growing faster than peers.”
They are also impressed by its underwriting offering, which allows it to increase its reach with subprime and near-prime borrowers.
Increased demand for buy now, pay later and pay in four offerings along with Affirm’s strong distribution with major eCommerce platforms “should drive strong market share gains and provide a path towards Affirm becoming one of the first new closed-loop platforms in the payments ecosystem,” they wrote in a note to clients.