Berenberg downgrades Hargreaves Lansdown to 'hold', slashes target price

Analysts at Berenberg slashed their target price on financial services firm Hargreaves Lansdown from 1,700.0p to 1,250.0p and downgraded the stock to 'hold' on Thursday, stating catalysts appeared to be limited, for now.

Berenberg noted that Hargreaves Lansdown's share price was down roughly 14% since its interim results on Tuesday due to a combination of lighter-than-expected net new business and earnings per share, alongside a suspension of special dividends and a higher cost trajectory than its analysts had predicted.

The German bank said it still thinks Hargreaves Lansdown's strategic plan to future-proof the business was "logical", that the group remains "favourably exposed" to UK retail wealth structural growth trends and that its first-half results likely drove a material reset of investor expectations.

However, Berenberg highlighted that it now struggles to find a near-term catalyst to drive outperformance, given increased outlook and execution uncertainty.

"As such, although HL trades at a discount to long-run consensus multiples, on circa 20x our full-year 2024 earnings per share, we downgrade to 'hold'," concluded the analysts.