Citizens reiterated its Market Outperform rating on LendingClub and kept a $23.00 price target in a research note published Thursday. The firm noted that the $23 objective closely aligns with InvestingPro's Fair Value assessment and that, at a last-quoted price of $19.57, the stock appears undervalued relative to that benchmark.
In its note, Citizens cited several core drivers behind its constructive stance: a stable credit outlook, accelerating originations, the rollout of additional products and rising demand across LendingClub's marketplace loan channels. These themes were emphasized at the company's November Investor Day and were reiterated during the most recent quarterly earnings call, according to the research note.
Supporting Citizens' view, InvestingPro data show that LendingClub has produced a 49.28% price return over the past six months, and the analyst community continues to carry a Buy consensus on the name. Citizens characterized the post-close price drop as a "temporary (and opportunistic) mismatch" rather than evidence of a deterioration in LendingClub's underlying business fundamentals.
The research note highlighted reported losses, recent delinquency trends and management's constructive commentary on consumer health as items that support the bank's expectation for continued stability in loss rates through 2026. Citizens also pointed to LendingClub's stepped-up marketing expenditure as consistent with the company's November presentation forecasting accelerating originations.
On valuation, Citizens outlined specific price points that would prompt additional buying. The firm said it would be particularly interested in purchasing shares below 10 times current-year guidance and at roughly 7.5 times its 2027 estimate. The $23 price target corresponds to about 10 times Citizens' current forecast for 2027 earnings per share. While LendingClub's trailing price-to-earnings ratio stands at 22.39, Citizens noted the stock's very low PEG ratio of 0.25 as an indication that the market price may not fully reflect the company's growth potential.
Citizens' commentary also emphasized recent quarterly results. LendingClub reported fourth-quarter 2025 earnings per share of $0.35, narrowly ahead of a $0.34 consensus estimate, representing a 2.94% surprise. Revenue for the quarter was $266.5 million, topping projections of $262.64 million and producing a 1.47% surprise. Despite the upside to both EPS and revenue, the stock closed the trading session lower, a move Citizens described as part of the aforementioned temporary mismatch.
Context for investors
- Citizens views the combination of credit stability and accelerating originations as supportive of LendingClub's near-term earnings trajectory.
- The firm has identified concrete valuation thresholds that would increase its buying conviction.
- Short-term market reactions following earnings did not alter Citizens' qualitative assessment of the business.