Macro Trends A Positive For LendingTree

Loop Capital Markets analyst Blake Harper believes there is no change in macro trend or data for Lendingtree Inc (NASDAQ: TREE). The analyst's confidence remains intact for the near term. Therefore, Harper reiterated the Buy rating and $150 target price on the company.

In the last four quarters, the company's EPS provided positive surprise ranging between 18.8 percent and 243.1 percent. The comments come on the heels of the company reporting two positive factors:

• A 43 percent year-over-year growth in loan requests from first-time home buyers.
• The quarter-over-quarter increase — though modest — in average down payment percentage.

The brokerage is not worried about the impact of the content market channel shut down for the credit card unit and believes it will have a minimum impact to the bottom line. LendingTree is also hoping for a removal of the injunction; the hearing is slated for September 29.

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The analyst pointed out there has been no change in the traditional 30-year fixed mortgage rates, referencing the Bankrate Inc (NYSE: RATE) announcement. On a seasonally adjusted basis, volume of mortgage applications recorded 1.0 percent uptick last week on top of a 2.8 percent growth in the preceding week.

In the research note, the brokerage said, "Expectations for rising interest rates could change around the FOMC meeting on 9/20–21 but we believe LendingTree is still positioned to grow faster than the mortgage and lending industry in the event there is a downturn due to higher rates."

The stock closed Wednesday's regular trading session at $98.16 and was up 3.72 percent to $101.81 at time of writing Thursday.

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