BTIG analyst Vincent Caintic upgraded Affirm (AFRM) to Buy from Neutral with a $68 price target. The firm coupled the upgrade with a downgrade of American Express (AXP) to Sell from Neutral. BTIG says Affirm is on a path to GAAP profitability. The company has room to beat Amex’s operating income margin of 20% since Affirm’s guidance for 19% operating income margin “implies overly rapid expense growth,” the analyst tells investors in a research note. In addition, Affirm’s take-share of point of sale finance and merchant engagement fits into BTIG’s broader consumer finance thesis, with prime consumer credit cards shedding market share as they react to worsening credit losses, adds the analyst. The firm expects merchant engagement to accelerate with Affirm and other payments providers, as traditional point of sale finance providers pull back.
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