Citi analysts upgraded Robinhood Markets (NASDAQ:HOOD) to Neutral from Sell, setting a new price target of $18 on the stock. The analysts noted that Robinhood's shares dropped nearly 12% on Friday due to concerns over the potential impact of lower interest rates. However, the analysts highlighted that the company's fundamentals have shown improvement recently, with notable growth in deposits, margin balances, and options/equities trading.

Following the recent decline in Robinhood's stock, Citi believes that the current valuations present a more balanced risk/reward scenario. The upgrade comes ahead of Robinhood's second-quarter earnings report, scheduled for Wednesday, August 7, where positive updates on growth initiatives such as UK expansion and the Gold card are anticipated, along with an overall favorable outlook on the company's fundamentals.

Currently, Robinhood shares are trading more than 7% down intra-day, after a slight recovery from a significant drop of around 20% earlier in the morning.