Robinhood Rallies as Morgan Stanley Upgrades Stock, Citing Post-Election Optimism

Key Highlights:

Morgan Stanley upgraded Robinhood Markets (HOOD) to "overweight" from "equal weight" and significantly increased its price target from $24 to $55.

Analysts pointed to Robinhood as a key beneficiary of Donald Trump's presidential election victory, anticipating favorable cryptocurrency policies.

The bank forecasts a strong retail trading environment, supported by potential deregulation, increased M&A activity, and an eventual revival of IPOs.

Shares of Robinhood Markets surged Monday after receiving an upgrade from Morgan Stanley, which identified the platform as one of the largest beneficiaries of the recent U.S. presidential election. Analysts linked the optimism to the likelihood of reduced cryptocurrency regulation under President-elect Trump, who has expressed aspirations to position the U.S. as the "cryptocurrency capital of the planet."

Morgan Stanley expects this regulatory relaxation to enable Robinhood to expand its crypto trading operations significantly. 

The firm also highlighted potential growth in retail trading, driven by post-election enthusiasm, a recovery in mergers and acquisitions (M&A), and an uptick in IPO activity heading into 2025.

The bank raised its revenue growth projections for Robinhood by 6% in 2025, 13% in 2026, and 21% in 2027. Adjusted earnings per share (EPS) forecasts for the same periods were boosted by 10%, 28%, and 50%, respectively.

Robinhood's stock traded at $37.53 on Monday, marking its highest level since October 2021, up more than 2% during the session. This reflects growing confidence in the platform's ability to capitalize on shifting market dynamics and regulatory opportunities.