Barclays initiates coverage on Chime Financial stock with Overweight rating

Investing.com - Barclays (LON:BARC) initiated coverage on Chime Financial (NASDAQ:CHYM) with an Overweight rating and a price target of $40.00 on Monday. According to InvestingPro data, the stock appears undervalued based on its Fair Value analysis, despite falling nearly 16% year-to-date.

The investment bank views Chime as a San Francisco-based fintech company that provides digital banking services primarily to low- and middle-income consumers.

Barclays highlighted that Chime’s majority payments-driven model more effectively monetizes "everyday Americans" compared to traditional banks’ balance sheet-driven models.

The firm noted that low- to middle-income consumers represent a majority of the population, positioning Chime as a legitimate banking alternative rather than merely a "downsell" strategy for consumers unable to obtain traditional bank accounts.

Barclays also pointed to Chime’s comprehensive product suite with what it considers best-in-class user engagement, which should continue to drive healthy growth for the company.

In other recent news, several investment firms have initiated coverage on Chime Financial, highlighting various aspects of the company’s performance and potential. Wolfe Research gave Chime Financial an Outperform rating, emphasizing the company’s average revenue per active member and its underpenetrated market, which suggests room for growth. William Blair also rated the company as Outperform, citing Chime as a beneficiary of the shift towards digital banking solutions, particularly among younger consumers. Meanwhile, Goldman Sachs offered a Neutral rating, acknowledging Chime’s quality in consumer fintech but expressing concerns over its current lack of profitability. Morgan Stanley (NYSE:MS) provided an Overweight rating, noting Chime’s success in acquiring primary account status and potential for revenue growth. Piper Sandler also rated Chime Financial as Overweight, predicting that its MyPay offering will drive future profitability. These assessments reflect a range of perspectives on Chime Financial’s current position and future prospects in the financial technology sector.

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