Numis Securities has abandoned its positive stance on Hargreaves Lansdown PLC (LON:HL.) ahead of the wealth management firm’s fiscal first quarter trading update next week.
The new rating is ‘hold’, down from ‘add’, with a price target of 2,102p. The shares currently trade at 2,178p, down 25p on the day.
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Numis expects Hargreaves Lansdown (HL) to report net inflows have risen 10% to £1.74bn compared to net new business of £1.54bn in the same period of last year, with assets under administration (AuA) up 0.1% from the June year-end to £91.7bn.
In the three months to the end of September, the market has fallen by 1.8% so the net inflows will just about cover that shortfall but the market slide has prompted Numis to trim its full-year earnings per share forecast by 2.9% to 55.6p.
“We believe HL is a structural growth story, which it has been ever since IPO and should remain, possibly for decades to come,” Numis said.
“Despite the scale that HL has built, our organic net inflow run rate remains in double digits where we believe it can remain over the medium to long term due to the structural industry growth,” the broker said.
Numis believes the force is with Hargreaves Lansdown, largely because of the shift to private pensions and the increasing popularity of do-it-yourself portfolio management.