Chime (NASDAQ: CHYM), the online banking startup that went public last month, is receiving a strong vote of confidence from Morgan Stanley, which initiated coverage on Monday with a bullish outlook and a price target suggesting more than 20% upside potential.
Founded in 2012, Chime provides traditional banking services—including fee-free checking and savings accounts—to U.S. consumers earning up to $100,000 annually. According to Sakhrani, these everyday earners are often underserved by traditional financial institutions.
Morgan Stanley analysts gave Chime an “overweight” rating and set a $39 price target, citing the company’s significant potential for revenue expansion. Chime stock gained roughly 1% on Monday, closing near $32. The stock has already climbed about 17% from its IPO price of $27.
Morgan Stanley pointed to Chime’s “proven ability” to become the primary bank account for its users and effectively scale its customer base. Analysts noted they are “optimistic about Chime’s ability to maintain fast revenue growth and fairly consistent margin expansion,” especially as card spending rises among households earning under $100,000—a demographic central to Chime’s strategy.
While Morgan Stanley’s outlook is notably upbeat, other major firms were more cautious. UBS, Goldman Sachs, and Deutsche Bank all initiated coverage with neutral ratings. In a client note Sunday, Deutsche Bank flagged concerns over “the macro-sensitive nature” of Chime’s target customers and the tough competitive landscape for digital-first financial services.
Goldman Sachs highlighted ongoing profitability challenges, writing, “We believe the lack of profitability is an overhang in the near term, and see valuation as somewhat full at current levels.” Goldman set a price target of $34, while UBS and Deutsche Bank both issued targets of $35.
KBW research analyst Sanjay Sakhrani is also bullish on Chime’s prospects, stating in a July 7 research note that the digital banking platform is becoming a clear leader in the segment focused on low-income consumers. He assigned Chime an “Outperform” rating with a $42 price target.
“Few digital platforms have the technology infrastructure, product-market alignment, and innovation velocity required to serve this demographic effectively and profitably, and we think Chime is one of them,” Sakhrani wrote.
After years of speculation, Chime finally went public on June 12, with shares surging 37% on their debut. Though the stock experienced some early volatility, it has consistently remained above its $27 IPO price. As of Tuesday afternoon, shares were trading above $31.
Wall Street typically waits 25 days after an IPO before releasing formal coverage. Chime’s debut was 26 days ago, opening the door for analysts to weigh in.
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