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On Monday, Citi analysts downgraded LPL Financial Holdings (NASDAQ:LPLA) stock to neutral from buy. The decision comes after the stock’s recent 19% increase quarter-to-date, reaching near historic highs in terms of valuation. According to InvestingPro data, LPLA is trading near its 52-week high of $390.23, with a P/E ratio of 26.7 and a market capitalization of $31.1 billion.
The analysts set a price target of $400.00 for LPL Financial, expressing concerns about limited near-term catalysts. They highlighted that the company is currently navigating the acquisition and integration of Commonwealth, which may present challenges. InvestingPro analysis suggests the stock is currently trading above its Fair Value, though the company maintains a GOOD overall financial health score with strong liquidity metrics.
While Citi remains optimistic about LPL Financial’s long-term growth potential, driven by strong recruiting trends and opportunities for expansion, they noted the possibility of increased competition for financial advisor recruiting. The company has demonstrated robust growth with revenue increasing 25.7% over the last twelve months. For deeper insights into LPLA’s growth metrics and 12 additional ProTips, consider accessing the comprehensive Pro Research Report on InvestingPro.
The analysts stated, "While we remain constructive on the long-term story, at current levels we believe the positive elements of the story are priced in and see balanced risk/reward here; preferring to wait for a more attractive entry point."
LPL Financial’s stock valuation is currently seen as elevated, trading at 21 times, 18 times, and 14 times the estimated earnings per share for 2025, 2026, and 2027, respectively.
In other recent news, LPL Financial Holdings has reported strong financial performance, leading to several analyst firms raising their price targets for the company. JMP Securities increased its price target to $440 following LPL Financial’s first-quarter earnings per share (EPS) of $5.15, surpassing both their estimate and the consensus. The company’s revenue reached $3.67 billion, driven by a notable increase in sales-based commissions, although revenues from Investment Company Account services fell short of expectations. Similarly, Keefe, Bruyette & Woods raised their target to $405, noting an earnings beat attributed to higher net commission and advisory fees, alongside reduced operating expenses. Morgan Stanley (NYSE:MS) also raised its price target to $450, reflecting a positive outlook on LPL Financial’s earnings potential and robust revenue growth. Additionally, Redburn-Atlantic upgraded the stock rating from Neutral to Buy, citing the company’s strategic positioning in the advisor-mediated market. In corporate developments, LPL Financial announced the upcoming resignation of Chief Legal Officer Althea Brown, who will leave her position in June 2025. These developments highlight LPL Financial’s strong financial performance and strategic initiatives amidst an evolving market landscape.
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