Affirm Gets A Morgan Stanley Upgrade Ahead Of Earnings – Firm Sees AFRM Stock’s Weakness As A ‘Compelling’ Opportunity

The firm’s review suggests the challenges impacting Affirm are likely temporary and should ease over time.

• Morgan Stanley analyst James Faucette explained that the recent dip in Affirm’s share price creates what he sees as a “compelling” opportunity for investors. 
• AFRM stock has declined by over 16% year-to-date. 
• For its second-quarter (Q2) fiscal 2026, analysts expect a revenue of $1.05 billion and earnings per share (EPS) of $0.84. 

Morgan Stanley has shifted its stance on Affirm Holdings Inc. (AFRM), upgrading the stock to an ‘Overweight’ recommendation from ‘Equal Weight’ with a revised price target of $76, down from the previous $83 ahead of its earnings on Thursday. 

This marks a renewed vote of confidence in the buy-now, pay-later fintech despite recent pressure on its shares and concerns around consumer credit trends, according to TheFly. However, the price target was revised to reflect near-term growth and credit risks.

Affirm stock traded over 4% higher in Tuesday’s premarket. However, on Stocktwits, retail sentiment around the stock remained in ‘bearish’ territory, and message volume changed to ‘high’ from ‘normal’ levels in 24 hours. 

Why Did Morgan Stanley Shift Its Stance On AFRM?

Morgan Stanley analyst James Faucette explained that the recent dip in Affirm’s share price creates what he sees as a “compelling” opportunity for investors, particularly given uncertainties tied to growth slowdown and credit conditions. 

The firm’s review suggests the challenges impacting Affirm, particularly the deceleration in growth and elevated consumer credit concerns, are likely temporary and should ease over time. 

Morgan Stanley reiterated its belief in the broader buy-now, pay-later (BNPL) segment’s increasing share of e-commerce payments, and positions Affirm as a pivotal participant in that shift.

AFRM stock has declined by over 16% year-to-date. 

New Alliances Strengthen Platform Expansion 

Affirm has announced a series of partnerships this year, expanding its payments platform business. The company formed a long-term alliance with Intuit Inc. (INTU) to integrate its pay-over-time solution into QuickBooks Payments, providing small and medium-sized enterprises with enhanced checkout flexibility while improving cash flow.

The company has also deepened its collaboration with Expedia Group (EXPE), naming Affirm as the exclusive installment payment option across Expedia’s key U.S. travel brands, aiming to help customers book trips with more ease.

For its second-quarter (Q2) fiscal 2026, analysts expect a revenue of $1.05 billion and earnings per share (EPS) of $0.84. 

AFRM stock has gained over 3% in the last 12 months. 

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