Barclays PLC (LSE:BARC) has cut Hargreaves Lansdown PLC (LSE:HL.)’s price target prior to the asset management firm’s first-quarter results on October 19, though the bank still sees upside potential against current spot prices.
City confidence remains cautious on Hargreaves, even though the company beat full-year profit guidance in its most recent earnings call.
Speaking to shareholders in mid-September, newly appointed chief executive Dan Olley said that prevailing economic conditions are likely to impact investor confidence in the upcoming financial year.
Persistently high interest rates are expected to be a tailwind for flows into Hargreaves’ Active Savings accounts, but are also expected to bottleneck new investment flows and deal volumes as the financial year progresses.
Hargreaves also has to contend with new fair-value assessment rules, which have led to broad-brush wealth-management price downgrades.
Investors will be keen to hear what Olley has to say about net interest margins, which are currently expected to trend between 180 and 200 basis points.
In the meantime, Barclays analysts retain an overweight rating on Hargreaves stock, albeit with the price target reduced form 1,280p to 1,250p.