• UPST stock is down 10.7% to $32 in Wednesday's premarket.
  • Morgan Stanley downgraded UPST to Underweight.
  • Analyst James Faucette sees Upstart having trouble growing amid higher interest rates.

Upstart Holdings (UPST) stock has lost more than 10% in Wednesday's premarket after a downgrade by Morgan Stanley. The investment bank's analyst James Faucette says with interest rates expected to rise even more in the second half of the year, Upstart may receive less demand for its often high-priced loans. UPST shares traded down 10.7% to $32 in the premarket.

Also readApple Stock Deep Dive: AAPL price target at $100 on falling 2023 revenues

Upstart stock news

Morgan Stanley's James Faucette sees Upstart in a bad position ahead of a higher interest rate environment. "Deteriorating relative underwriting performance and increasing required returns from institutional partners have shifted our view incrementally negative, and we see downside risk to estimates and valuation as the platform's cyclicality is tested," Faucette said in his investor note. Faucette changed UPST's rating to Underweight from Equalweight. 

This comes just a few days after Wedbush put out a note concerning worries over Upstart's delinquency rates. Analyst David Chiaverini said that Upstart's asset-backed securities that are traded on Wall Street could possibly meet the criteria for early amortization triggers in July. Hitting these triggers would mean that Upstart's delinquencies were worse than expected from rating firm Kroll and may mean that Upstart will need to offer lower prices on its ABS portfolio in the future.

"A lower than average rollover rate may prevent the triggers from being tripped in the near month. Nonetheless, we are surprised at this level of deterioration given UPST's loan modification policy change occurred in April 2022," Chiaverini wrote. 

Upstart stock forecast

Nothing about the Upstart stock daily chart below looks good. Well, at east the Moving Average Convergence Divergence (MACD) is trending higher. UPST stock price is trending below the 9-day moving average though, and its recent range high on June 24 came in below the earlier range highs from early June and late May. Shares of the AI lender that has developed its own non-FICO credit score are not popular on the Street.

The most likely move would be UPST stock trending down to support at $26. UPST is not neutral until above $55 and not bullish until $72.50. 

UPST 1-day chart


Like this article? Help us with some feedback by answering this survey:

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD corrects below 1.0300 as DXY strengthens ahead of US Michigan CSI

EUR/USD corrects below 1.0300 as DXY strengthens ahead of US Michigan CSI

EUR/USD has tumbled to near 1.2850 amid a significant recovery in the DXY. A lower US CPI print has trimmed the odds of hawkish guidance while rate hike odds are solid. This week, the US Michigan CSI data will be of utmost importance.

EUR/USD News

GBP/USD: Bears could be about to make their moves

GBP/USD: Bears could be about to make their moves

GBP/USD bulls are tiring following the overnight rally that was sparked by a miss in US Consumer Price Index. There are complications for the bulls at this point as they run into weekly resistance and there is a reversion pattern left behind on the daily chart that followed Wednesday's rally.

GBP/USD News

Gold slips below $1,790 as DXY extends recovery, Michigan CSI eyed

Gold slips below $1,790 as DXY extends recovery, Michigan CSI eyed

Gold price has dropped to near $1,785.00 after surrendering the critical support of $1,788.00 in the Asian session. The precious metal has entered into a healthy correction phase after printing a fresh monthly high at $1,807.96 on Wednesday.

Gold News

Shiba Inu price edges close to a 60% breakout as bears watch in disbelief

Shiba Inu price edges close to a 60% breakout as bears watch in disbelief

Shiba Inu price has managed to stay above the POC at $0.0000118, indicating support from bulls. A continuation of this momentum could trigger a 60% rally to $0.0000200. A daily candlestick close below the $0.0000106 support level will invalidate the bullish thesis for SHIB.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures