Morgan Stanley initiates Chime Financial stock with Overweight rating

Investing.com - Morgan Stanley (NYSE:MS) initiated coverage on Chime Financial (NASDAQ:CHYM) with an Overweight rating and a $39.00 price target on Monday. According to InvestingPro data, the stock currently trades at $31.32, suggesting significant upside potential based on Morgan Stanley’s target.

The investment firm cited Chime’s demonstrated success in winning primary account status while maintaining consistent customer growth as key factors in its positive outlook.

Morgan Stanley highlighted Chime’s strong uptake on new financial products and ability to maintain high incremental margins, giving the firm confidence that Chime can effectively target its demographic opportunity in the US market.

The research note mentioned improved US consumer spending growth over the past six weeks, with data showing better-than-expected card spending growth, particularly among Chime’s core under-$100K income customers.

Morgan Stanley expressed optimism about Chime’s potential to maintain rapid revenue growth and consistent margin expansion, noting that current forecasts for new users and services growth might prove conservative.

In other recent news, Chime Financial has successfully raised $864 million in its initial public offering, pricing shares at $27 each, which was above the anticipated range. This IPO values the company at approximately $11.6 billion, marking a significant public debut for a U.S. financial technology firm. In terms of analyst coverage, Piper Sandler, JPMorgan, UBS, and Seaport Global Securities have all initiated coverage on Chime Financial with varying ratings. Piper Sandler and JPMorgan have both given Chime an Overweight rating, with a price target of $40.00, highlighting the company’s potential for growth in a large market of Americans earning less than $100,000 annually.

UBS has initiated Chime with a Neutral rating and a $35.00 price target, noting the company’s strategy to avoid punitive fees as a path to increased scale and profitability. Seaport Global Securities has issued a Buy rating with a price target of $37.00, citing Chime’s strong brand and market opportunity as key factors. Analysts project significant revenue growth for Chime, with JPMorgan forecasting a 20% compounded revenue growth through 2027 and Seaport Global projecting high 20% to low 30% annual growth over the next two years. These recent developments indicate a strong interest in Chime’s financial services model and its potential for continued expansion.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.