Robinhood Hits 3-Year High After Analyst Upgrades Stock On Hopes Of Trump-Led Crypto Overhaul: Retail Holds Back

Robinhood Markets Inc. ($HOOD) saw its stock rise more than 8% on Monday, reaching three-year highs after a positive shift in Wall Street sentiment eyeing favorable regulatory changes under President-elect Donald Trump’s administration.

The last time the stock was trading at these levels was in November 2021.

Needham upgraded the brokerage to ‘Buy’ from ‘Neutral,’ setting a $40 price target. The brokerage believes Robinhood is poised to be a “major beneficiary” of changes in crypto trading regulations under Trump.

According to Needham’s research note, the new US President’s expected changes within the SEC could enable Robinhood to broaden its crypto offerings, following the four recently introduced tokens – Ripple ($XRP.X), Pepe ($PEPE.X), Solana ($SOL.X) and Cardano ($ADA.X).

During a Bitcoin conference in July, Trump had pledged to remove SEC Chair Gary Gensler "on day one" in office.

Among the leading candidates to replace Gensler is Dan Gallagher, Robinhood's Chief Legal, Compliance, and Corporate Affairs Officer, according to Reuters.

Robinhood Markets Sentiment and Message Volume on Nov 18 as of 11:00 a.m. ET | Source: Stocktwits

Retail sentiment around the stock continues to be ‘bearish’ on Monday morning despite the bullish outlook from Wall Street. 

The brokerage highlighted the stability provided by Robinhood’s Equity and Margin Business segments, which could help offset volatility in the crypto market.

Meanwhile, Piper Sandler analyst Patrick Moley also raised his price target for Robinhood, lifting it to $36 from $30 while maintaining an ‘Overweight’ rating. 

Piper Sandler views Robinhood as well-positioned to capitalize on the ongoing crypto market rally, with robust retail engagement and increased transaction volumes expected to continue as long as the bull market persists.

Robinhood’s stock suffered a significant drop late last month, following a miss on Wall Street’s quarterly revenue expectations. 

Management attributed the disappointing results to an expensive customer promotion program, which involved matching bonuses to incentivize account transfers from rival brokerages.

Despite the setback, Robinhood's stock has bounced back significantly, driven in part by a "Trump Bump" following the 2024 U.S. election results.

Robinhood’s stock has gained 181% this year, comfortably outpacing broader market indices.