Hargreaves Lansdown PLC (LON:HL.) has been upgraded to ‘hold’ from ‘sell’ by analysts at Deutsche Bank following its latest set of full-year results, which showed a profit jump and a record number of new clients.
In a note on Thursday, the bank also upped its price target for the investment firm to 1,600p from 1,425p, saying the results provided “clear evidence of the strength of the Hargreaves Lansdown business model.
“Despite the reputational headwinds of 2019, its market share has remained resilient and there is continued investment into the business to support both current and future growth”, Deutsche’s analysts said, adding that increased investor engagement and the surge in customer numbers meant the outlook for flows “looks brighter”.
The bank also said that despite margin headwinds facing the company, including a “substantial threat to the cash margin and sub-benchmark performance issues in the HL multi-manager funds”, these have been mitigated in the near term as analysts believed the shares revenue margin “will stay higher for longer…due to elevated trading activity”.
Shares in Hargreaves Lansdown were up 0.4% at 1,651.5p in late-morning trading.