Key Takeaways
- Morgan Stanley’s ETrade platform is reportedly negotiating to exclusively manage SpaceX’s retail IPO allocation, sidelining Robinhood and SoFi
- Sources indicate SpaceX may completely exclude both Robinhood and SoFi from participating in the offering, though negotiations continue
- Bernstein SocGen reduced HOOD’s price target from $160 down to $130 but maintained its Outperform recommendation
- Analysts anticipate 25% EPS expansion in 2026 and project a 30% revenue compound annual growth rate spanning 2025–2027
- Shares of HOOD are currently trading approximately 54% beneath their 52-week peak of $153.86
Robinhood Markets is experiencing turbulent times. Trading at $66.02, the brokerage platform’s shares have declined more than half from their yearly high. Monday delivered a double setback — troubling news about a blockbuster IPO opportunity and a downward revision from Wall Street analysts.
According to Reuters, Morgan Stanley’s ETrade division is negotiating to spearhead the retail investor segment of SpaceX’s highly anticipated public offering. This development would position ETrade favorably against Robinhood and SoFi, both companies having actively pursued involvement in what analysts describe as potentially the largest IPO ever recorded.
Insider sources suggest SpaceX executives are contemplating whether to completely remove both platforms from participation. However, these same sources emphasized that arrangements remain fluid and subject to modification ahead of the anticipated listing later this year.
Losing access to this opportunity would represent a significant setback. Robinhood and SoFi previously participated in notable market debuts including Arm Holdings’ $55 billion offering and Instacart’s $9.9 billion IPO during 2023. Being excluded from SpaceX carries different implications — affecting both retail investor access and Robinhood’s positioning as a premier destination for major public offerings.
Neither platform maintains relationships with the investment banks orchestrating the SpaceX transaction. Morgan Stanley, serving as a principal underwriter, is anticipated to channel substantial retail allocation volume through ETrade, the brokerage it purchased in 2020.
Analyst Reduces Price Objective
Also Monday, Bernstein SocGen lowered its HOOD valuation target from $160 to $130, attributing the adjustment to valuation considerations. The firm preserved its Outperform designation, signaling continued confidence in the stock’s upside potential — though with more conservative pricing expectations.
The updated forecast incorporates a reduced earnings multiple: 35 times projected 2027 EPS, decreased from the previous 40 times benchmark. This calculation assumes a 32% EPS compound annual growth rate spanning 2025 through 2027.
Notwithstanding the reduction, the analyst maintains an optimistic perspective on Robinhood’s fundamental business trajectory. Their models anticipate 25% EPS expansion during 2026, even accounting for anticipated weakness in first-quarter equity and cryptocurrency activity. Revenue is projected to expand at a 30% CAGR extending through 2027.
Prediction markets represent an emerging growth catalyst. Bernstein SocGen estimates these markets will generate approximately 17% of trading revenue and 10% of overall revenue in 2026, bolstered by Robinhood’s distribution agreement with Kalshi and its proprietary Rothera exchange infrastructure.
Additional Wall Street Perspectives
Cryptocurrency trading is also expected to rebound substantially. Analysts project a 79% year-over-year surge in crypto trading volumes throughout the second half of 2026, facilitated by the completed Bitstamp acquisition.
Non-trading revenue streams are forecast to expand 27% year-over-year. This encompasses margin lending operations on a $17.2 billion portfolio, Gold subscription services reaching 4.2 million members, and banking deposit balances exceeding $1 billion.
Wall Street opinion remains divided. Barclays maintains an Overweight stance with a $124 price objective. Truist rates the stock a Buy with a $120 target. Jefferies initiated coverage with a Buy rating and $88 price target. Cantor Fitzgerald demonstrates more caution, reducing its target to $95 based on revised revenue projections.
Robinhood’s leadership recently authorized a $1.5 billion share repurchase initiative, which garnered favorable commentary from multiple research firms.
The stock presently commands a P/E ratio of 32.25 with a market capitalization of $59.44 billion.
