Robinhood Misses Out on S&P 500. Why Analysts Are Still Upbeat.

Analysts at Piper Sandler and Morgan Stanley raised their price targets for the online brokerage. (Dreamstime)

Despite missing out on a chance to join the , Robinhood Markets has stellar quarterly results to look forward to, analysts say.

The online brokerage was passed over for including in the market benchmark late on Monday. S&P Dow Jones Indices instead chose The Trade Desk as a replacement for Ansys , which is being acquired by S&P 500 constituent Synopsys.

As of Monday’s close, Robinhood had a market valuation of $88.2 billion, more than double Trade Desk’s $37.1 billion.

Robinhood stock was down 1.5% to $98.47 on Tuesday, while Trade Desk climbed 12%.

The disappointment may be short-lived, however: Two Wall Street firms raised their forecasts for the brokerage’s next earnings report. Robinhood, which has soared more than 168% this year, will release its second-quarter results on July 30.

“The second quarter presented an overwhelmingly positive environment for exchange and trading companies,” wrote Piper Sandler’s Patrick Moley in a research note Tuesday.

Turmoil in global trade, and the market volatility it caused, drove trading volumes to strong seasonal levels, Moley noted, saying Robinhood may be one of the beneficiaries. Piper Sandler reiterated an Overweight rating for the stock and lifted its target for the price to $110 from $70.

The firm now projects Robinhood will post earnings of 34 cents a share for the quarter ended last month, compared with a consensus call of 31 cents among analysts polled by FactSet. Piper Sandler also boosted its 2025 and 2026 fiscal-year outlooks for Robinhood.

Beyond the industrywide strength—Piper Sandler also raised targets for companies such as Interactive Brokers Group and Charles Schwab —Moley pointed to Robinhood’s growing product pipeline. The brokerage has relentlessly added to its offerings in recent quarters, most recently unveiling a raft of crypto-focused products in June.

Robinhood received an even larger boost Tuesday from Michael Cyprys at Morgan Stanley, who maintained an Equal Weight rating for the stock, but nearly tripled his price target to $110 from $43. Cyprys had downgraded the stock from Overweight in April.

Trading activity has normalized across brokerages since the initial shock of President Donald Trump’s “Liberation Day” tariffs in early April, Cyprys said, arguing that “retail investors remain engaged through the
period of market volatility and through the subsequent rebound in risk assets.”

In the short term, Morgan Stanley sees Robinhood’s earnings coming in above consensus at 33 cents a share for the second quarter. Looking forward, the bank is optimistic about the earnings potential of new business lines.

“While we remain Equal-weight, our conviction in the long-term HOOD story has not wavered,” Cyprys wrote. “We simply suspect there will be more attractive entry points going forward.”

Write to Nate Wolf at nate.wolf@barrons.com