Figure’s Mixed Wall Street Debut: KBW, BofA Diverge on Outlook
Two major Wall Street investment banks have issued differing opinions on the fintech firm Figure (FIGR), which recently went public. The company aims to expand its blockchain-based lending platform beyond home equity lines of credit (HELOCs).
- Keefe, Bruyette & Woods (KBW) rated Figure as "outperform" with a 12-month price target of $48.50, indicating a 17.5% potential upside.
- Figure holds significant market share in tokenized credit markets: 73% of the private credit segment and 39% of all tokenized real-world assets.
- KBW sees potential in Figure's tech stack for broader credit asset support, including first-lien mortgages and personal loans.
- Bernstein also rates Figure as "outperform" with a $54 price target, highlighting the efficiency and speed gains through asset tokenization.
The Flipside
- Bank of America (BofA) issued a "neutral" rating with a $41 price target, pointing out risks in execution, regulation, and reliance on HELOC revenue.
- BofA anticipates that Figure Connect will drive future growth, potentially contributing 75% of revenue growth between 2024 and 2027.
- The bank is cautious about scalability due to possible regulatory changes and competition.
The disparity in price targets — $48.50 from KBW and $41 from BofA — underscores the uncertainty regarding Figure's ability to transition from niche to mainstream finance.