Peel Hunt stays at 'buy' on Hargreaves Lansdown after 1H beat

Analysts at Peel Hunt reiterated their 'buy' recommendation for shares of Hargreaves Lansdown following the firm's full-year numbers, telling clients the results were "well ahead of expectations".

Underlying profits came in at £212m (consensus: £179m), the dividend was raised by 3.6%, as expected, and net new business rose by £1.6bn (consensus: £1.5bn).

As in the first quarter, most of the increase in new business originated in Active Savings (£1.3bn) and higher net interest income accounted for £122m of revenues, they noted.

The 168 basis point improvement in margins was well ahead of previous guidance , the analysts added.

"We are currently expecting underlying PBT/EPS of £345m/57.4p (company-compiled consensus stands at £358m/60p).

"Expect to increase by high single-digit percentage given the extra interest income, with slightly more benefit in the following year. Before any changes, the stock is trading on December 23E EV/EBIT of 13x, well below other platforms."

Peel Hunt kept its target price unchanged at 1,220.0p.