Hargreaves Lansdown (LON: HL.) shares fell more than 4% during Thursday's session, adding to its year-to-date decline after being downgraded by RBC Capital.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
The company's shares are flat so far Friday, but in 2022, they have declined 39%.
RBC Capital analyst Ben Bathurst downgraded Hargreaves shares to Sector Perform from Outperform, lowering the firm's price target on the stock to 1,050p from 1,650p in a research note. Bathurst told investors he sees a more challenging asset-gathering backdrop for UK wealth managers and investment platform providers, adding that Hargreaves faces uncertainty on a “number of fronts” and lacks near-term share catalysts.
That sentiment is shared by BofA Securities, who also downgraded Hargreaves shares earlier this week.
BofA analyst Andrew Sinclair moved the stock to Neutral from Buy, upping the firm's price target on Hargreaves shares to 1,050p from 1,000p. Sinclair told investors in his memo that the stock has bounced from lows, and while he sees longer-term potential, he thinks obstacles could weigh in the near term due to a challenging UK backdrop.
In contrast, late October saw Canaccord analyst Justin Bates upgrade Hargreaves Lansdown to Buy from Hold, cutting the price target to 1,148p from 1,695p. The analyst noted that since the company announced a larger-than-expected investment project at its capital markets day towards the end of February, its stock has declined 43%. However, Bates believes the high client and asset retention rate means “the shares should offer attractive compounding characteristics over the medium-to-long term.” He sees the share price pullback as a buying opportunity.