Affirm rallies as Morgan Stanley elevates to 'top pick', says private credit fears overdone

Affirm Holdings

17/04/2026 14:45

** Buy now, pay later co Affirm's AFRM.O shares up 5.3% to $63.50 early Fri as Morgan Stanley elevates to top pick

** Morgan Stanley, which had already rated AFRM 'overweight', says in note it sees a high probability of upward earnings estimate revisions and a credible path to resolving private credit overhang

** With investors wary of potential for perceived stress in private credit market to negatively impact AFRM's funding execution, Morgan Stanley believes those concerns are overdone as the analysts have yet to see any evidence of spread weakening in co's public asset-backed securitization deals

** Morgan Stanley says AFRM offers one of the most attractive risk-reward setups in its coverage, citing its $76 PT implying ~27% upside and a ~24x FY28 GAAP EPS multiple

** Jitters around private credit lending standards have pounded the stocks of alternative asset managers recently

** With the move on the session, AFRM shares down ~14% YTD vs Nasdaq's .IXIC nearly 5% rise

** 23 of 31 analysts rate the stock "strong buy" or "buy", 8 "hold"; median PT $83

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))