LendingTree Up Big After BofA Upgrade, Firm Sees $2.4 Trillion Opportunity

• Shares of Lendingtree Inc (NASDAQ: TREE) gained nearly 10 percent Thursday.
• Nat Schindler of Bank of America upgraded the stock to Buy from Neutral with an unchanged $122 price target.
• The analyst highlighted the company's an offline-to-online transition to a "huge market."

LendingTree stock is still lower by around 16 percent over following a secondary share offering in early November.

According to Nat Schindler of Bank of America, investors should take advantage of the weakness following the offering and "get in at a better price." In addition to a more attractive valuation, the analyst highlighted that the company is executing well in its early stages of an off-line-to-online transition.

Schindler upgraded LendingTree's stock to Buy from Hold with an unchanged $122 price target.

Related Link: Will Google's Mortgage Tool Hurt LendingTree, Other New-Age Lenders?

Schindler continued that the total addressable market for LendingTree is "enormous." The analyst pointed out that the U.S. debt outstanding market is over $12 trillion. In fact, on an annual basis, the company estimates there are $2.4 trillion in new consumer originations and the company's share is just $17 billion.

"We believe all online channels only account for a single digit share of loan originations, well below eCommerce at 14 percent of applicable retail and leisure hotel reservations at close to 37 percent in the US," Schindler wrote. "We believe that LendingTree is well positioned to capture market share across the full spectrum of consumer lending categories as the consumer becomes more accustomed to going online to bank."

Finally, Schindler pointed out that the company is scheduled to participate in two upcoming investor conferences, one of which is scheduled for Thursday. The analyst suggested that management could provide further insight into its recent Alphabet Inc (NASDAQ: GOOGL) agreement to provide a mortgage refinance marketplace and discuss the trajectory of its fourth quarter.