Upstart downgraded to Hold at Loop Capital on valuation

Loop Capital analyst Hal Goetsch downgraded Upstart to Hold from Buy with an unchanged $24 price target. The analyst notes that his price target has been reached after the recent rally in the stock, helped by a potential near term pause in FOMC rate hikes and the company’s current estimated short interest of 38%, but the difficult loan origination environment should make for a "difficult 2023". The firm adds that while the AI underwriting model is the future of lending, the platform model of matching consumers to lenders on the other side of the Upstart platform has not worked in this rising loss rate and interest rate environment.