HOOD’s Stock Gets Rare Price Target Hike After Wave Of Cuts Ahead Of Q1 Earnings

• Mizuho cited the SEC’s recent rule change, which removes the $25,000 minimum threshold, as the reason behind the price target hike.
• The firm estimated that the rule change could increase trading activity by 3% and add between 1% and 2% to the company’s revenue by 2027. 
• The price target hike comes after a recent wave of cuts from major banks ahead of Robinhood’s first-quarter earnings, on concerns around weaker crypto prices and softer trading volumes. 

Robinhood Markets (HOOD) shares fell in pre-market trade on Monday despite getting a price target hike from Mizuho amid broader weakness in the market after tensions between the U.S. and Iran escalated over the weekend.

Mizuho raised its price target on HOOD’s shares to $115 from $105 and kept an ‘Outperform’ rating, according to a note cited by TheFly. The new target is above the consensus average of $101.40, implying a potential upside of more than 26%, more than double the 11% based on the consensus.

HOOD’s stock dropped over 1% in pre-market trade. On Stocktwits, retail sentiment around the company continued to trend in ‘extremely bullish’ territory, accompanied by ‘extremely high’ levels of chatter over the past day. 

SEC Rule Change Could Support Trading Activity

Mizuho analyst Dan Dolev cited the Securities and Exchange Commission’s (SEC) rule change last week, which has ended the long-standing $25,000 minimum linked to the pattern day trader rule, as the reason behind the price hike. The rule has been replaced with broker-determined intraday margin requirements.

Mizuho analyst Dan Dolev based his price target hike on the Securities and Exchange Commission (SEC) ending the long-standing $25,000 minimum tied to the pattern day trader rule, replacing it with broker-determined intraday margin requirements.

The firm said it views the move as "structurally positive" for Robinhood, but added its proprietary survey of 160 traders with less than $25,000 suggests the near-term impact would be modest. It estimated that the change could increase trading activity by around 3%. 

Mizuho also noted that Robinhood is “over-indexed to smaller balances,” with about 25% of funded accounts affected. This could translate into a 1% to 2% lift to fiscal 2027 revenue estimates.

Wall Street Turns Cautious On HOOD Stock Ahead Of Q1 Earnings

Mizuho’s price target hike comes amid a broader round of cuts across Wall Street, largely tied to softer trading volumes and weaker crypto-related revenue expectations. 

Morgan Stanley cut its price target to $95 from $147 while maintaining an ‘Equal Weight’ rating, citing reduced near-term trading activity and pressure on crypto revenues. Truist Financial also trimmed its target to $100 from $120, keeping a ‘Buy’ rating, citing softer crypto prices and declining trading activity.

Bitcoin (BTC) edged 0.3% lower in the last 24 hours, but held above the $75,000 mark. On Stocktwits, retail sentiment around the apex cryptocurrency continued to trend in ‘bullish’ territory over the past day, accompanied by ‘high’ levels of chatter. 

Meanwhile, Bernstein lowered its price target on HOOD's stock to $130 from $160 but kept an ‘Outperform’ rating, pointing to muted trading volumes ahead of earnings. Citizens Financial Group reduced its price target to $155 from $180 while maintaining an ‘Outperform’ rating, part of a broader reset that also affected other crypto-linked firms.

HOOD’s stock has fallen over 20% this year but it has more than doubled in value over the past 12 months. 

Read also: BTC Price Dropping Another $3,000 Could Wipe Out All Ceasefire Gains, Analyst Warns

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