Hargreaves Lansdown has been downgraded by JP Morgan, which sees the wealth management platform’s growth and cost targets as too ambitious against a tough background.
A target of net new business (NNB) of10%/£20bn in the year to June 2026 looked ambitious even before the worsening of the macroeconomic environment, added the US bank.
“Other D2C platforms (eg. SAVE, AZA) have already reported a slowdown in activity in the second quarter.
“Apptopia data suggests poor customer acquisition in May and June at HL and possibly weak net new business (NNB) figures,“ it added.
JP Morgan's forecasts for earnings for the next two years have been reduced by 7% and 12% respectively while its target price is lowered to 770p.
“At the beginning of 2022 HL was trading at 25 times earnings and on average platforms have derated by 40% year to date, “which in our view leaves plenty of space for further derating at HL.”
Shares rose 1% to 806.6p.