Hargreaves Lansdown shares have fallen 27% since the start of the year and are 17% beneath pandemic lows says Credit Suisse.
That’s enough of a drop for worries about the fee margins, high operating margins and valuation all to be in the price, says the broker.
Hargreaves’ ambitious spending and growth plans are also reflected in the shares, says Credit Suisse, even allowing for a 0.25% margin dip and no additional business.
A trading update is due on 12 May and any price cuts would be received negatively in the first instance before fund flow benefits are taken into account.
“Set against this, further UK rate rises and these being passed on by banks into corporate savings rates would be well received, in our view.”
The price target is trimmed to 1,245p, but outperform remains the investment view.