LendingClub's Stock Gains After Analyst Upgrade

LendingClub Corp.'s stock tacked on 0.4% in premarket trade after the online loan marketplace was upgraded to overweight from sector weight at Pacific Crest Securities, which cited expectations that pricing trends should stabilize and optimism about the outlook for customer acquisition. Analyst Josh Beck said that after speaking with a number of advertising executives who specialize in consumer financial services, he saw no reason for investors to worry about irrational pricing. "We picked up increasing levels of marketing activity and some moderate pricing increases, none of the behavior or trends stood out as irrational," Beck wrote in a note to clients. "Our analysis of effective cost per funded loan, both offline and online, suggests that LendingClub can generate sustainable improvement in acquisition cost via conversion and channel mix." The stock, which went public on Dec. 11, has tumbled 26% year to date through Friday, while the S&P 500 has gained 1.7%, but was still 25% above its $15 initial public offering price.