Morgan Stanley: Upgrades Robinhood Rating, Predicts Markets to Become Growth Drivers

According to CNBC, Morgan Stanley upgraded its rating on Robinhood from "Equal Weight" to "Overweight," raising its price target from $124 to $150, representing approximately 43% upside from Monday's closing price. Morgan Stanley believes the market underestimates the per-user monetization potential among Robinhood's existing ~28 million users. The continued expansion of offerings such as prediction markets and derivatives is expected to boost user assets, trading activity, and revenue per customer. The firm noted that fewer than 2 million prediction market users contributed roughly $156 million in revenue during the second quarter, while additionally adopting other platform products. Meanwhile, Robinhood's derivatives exchange and clearing platform, Rothera, is expected to leverage its distribution advantage to expand into trading infrastructure, generating both the platform's own order flow and potential third-party revenue.