Deutsche Bank upgrades Hargreaves Lansdown on improved flow outlook
Hargreaves Lansdown
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Deutsche Bank upped its rating on shares of investment platform Hargreaves Lansdown to ‘hold’ from ‘sell’ on Thursday, lifting the price target to 1,600p from 1,425p as it said the improved flow outlook better justifies the price.
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Deutsche said the recent FY20 results provide 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," the bank said.
It also said the outlook for flows looks brighter, given increased investor engagement and the surge in customer numbers during the lockdown.
"Finally, though there are margin headwinds including a substantial threat to the cash margin and sub-benchmark performance issues in the HL multi-manager funds, these are mitigated near term by our belief that the shares revenue margin will stay higher for longer (above 30 basis points for the next three years) due to elevated trading activity."