Driven by three Wall Street institutions upgrading their ratings, Affirm Holdings (AFRM.US) experienced a significant increase in stock price this week.

According to the Securities Times, Wells Fargo & Co (WFC.US) is the latest institution bullish on this 'Buy Now, Pay Later' company. Led by Andrew Bauch, the bank's analysts upgraded Affirm's stock rating to 'shareholding' on Friday, raising its target price from $40 to $52.

Based on Dow Jones market data, Affirm's stock price surged over 12% on Friday, reaching $47.08. The stock has increased for three out of the last four days, with a total increase of 20%.

The Wells Fargo analyst team believes that in the next year, several growth catalysts will drive the stock price higher, including a payment partnership announced last month with Apple (AAPL.US) and interest rate cuts, which will stimulate growth and reduce Affirm's financing costs.

Analysts point out that over the years, Affirm has proven its ability to 'gain market share' in the e-commerce checkout market.

Affirm is expected to achieve operational profit in the fourth quarter of the 2025 fiscal year according to Generally Accepted Accounting Principles (GAAP). Wells Fargo states that this helps justify its high valuation: currently, Affirm's trading price is 52 times the expected earnings per share for 2026. In comparison, the trading price of financial technology peer Ally Financial is 6 times, while credit card giant American Express is 16 times.

Analyst team stated, "As GAAP profitability approaches, the valuation has finally become more attractive."

Wells Fargo & Co upgraded the company's rating earlier this week following BTIG and Morgan Stanley (MS.US) upgrading their ratings. BTIG upgraded Affirm's stock rating to "buy"; Morgan Stanley upgraded the stock rating from "shareholding" to "in line with the large cap index", mentioning the company's efforts towards high-income consumers.

In the past few months, Wall Street's view on Affirm has become more optimistic. According to FactSet data, currently, 45% of analysts rate Affirm's stock as a "buy", while in April this year, this proportion was only 28%.