Panmure Liberum has downgraded IntegraFin Holdings PLC (LSE:IHP) to 'hold' from 'buy', citing a reduced likelihood of significant further earnings upgrades and suggesting the shares are now fairly valued.
The decision follows IntegraFin’s strong third-quarter update, which showed continued net inflows growth and client numbers rising 6% annually to 245,000.
Panmure noted that the company’s platform revenue is benefiting from recent regulatory changes, including adjustments to pension allowances and inheritance tax rules, which have increased demand for financial advice.
However, it highlighted several reasons for its rating change. First, the potential for revenue margin outperformance has diminished after recent pricing cuts.
IntegraFin’s management now expects a slowdown in revenue margin attrition, forecasting only a 0.5 basis point decline annually compared with a previous assumption of 1 basis point.
Second, the broker points out that the cost growth that boosted earnings over the past three years is likely to moderate as the company’s digital investment cycle nears completion.
With more streamlined operations and reduced need for manual input, IntegraFin expects lower cost growth going forward.
Together, these factors mean Panmure has upgraded earnings per share estimates by 6% for 2026 and 13% for 2027 but believes the scope for further substantial upgrades is limited.
The shares now trade on a 2025 price-to-earnings ratio of 22 times, higher than the sector average of 19 times, reflecting IntegraFin’s strong reputation and service quality.
Panmure Liberum concludes that while IntegraFin remains well-positioned with consistent net inflows and improving operational efficiency, the share price appears to reflect these positives.
The shares were unchanged at 366.5p on Wednesday lunchtime.