Morgan Stanley downgraded Qifu Technology to equal-weight from overweight, citing persistent challenges in China’s consumer credit sector and liquidity constraints that are expected to weigh on the company’s core operations.
The brokerage reduced its price target to $13 from $25, reflecting a more cautious outlook for the fintech firm, which currently trades near its 52-week low of $10.85. Qifu’s shares were last quoted at $9.30, down 3.2% on the day after closing at $9.07 on Tuesday.
The downgrade comes as Qifu reported second-quarter 2026 adjusted earnings per share of $6.56, exceeding analyst expectations of $4.90, but revenue of $3.57 billion fell short of the $4.02 billion consensus forecast. The company also flagged a weak profit outlook for the third quarter, with guidance falling below market expectations.
Morgan Stanley highlighted liquidity difficulties, elevated delinquency rates, and funding restrictions as key headwinds. These pressures have intensified amid a broader slowdown in China’s consumer credit market and heightened credit risk across the sector.
Jefferies also adjusted its stance on Qifu, lowering its price target to $15.40 from $20.40 while maintaining a buy rating. The firm noted that loan volumes and non-GAAP earnings per share underperformed expectations, though it did not revise its recommendation.
Analysts at Morgan Stanley emphasized that the combination of liquidity challenges and difficulties in collecting delinquent debts would continue to constrain Qifu’s operations, reinforcing the weaker-than-expected earnings guidance for the third quarter of 2026.
