Futu Holdings stock price target raised to $172 from $143.90 at BofA

Investing.com - BofA Securities raised its price target on Futu Holdings Limited (NASDAQ:FUTU) to $172.00 from $143.90 while maintaining a Buy rating ahead of the company’s second-quarter earnings report expected in late August. The stock, currently trading at $157.11, has delivered an impressive 177.99% return over the past year. According to InvestingPro, analyst targets range from $124.85 to $200.00, with a strong consensus recommendation of 1.5 (Buy).

The firm forecasts Futu will add approximately 209,000 new paying clients in the second quarter, representing a 20% quarter-over-quarter decline from a seasonally high base, but still showing 35% year-over-year growth. This keeps the company on track to meet its fiscal year 2025 target of 800,000 new clients. InvestingPro analysis reveals the company maintains exceptional profitability with a 93.17% gross margin and has shown robust revenue growth of 54.51% over the last twelve months.

BofA expects total client assets to grow 12-13% quarter-over-quarter to HKD934 billion, driven by strong asset inflows and mark-to-market gains. The firm notes that Futu’s Hong Kong stock holdings increased 13% quarter-over-quarter in the second quarter, while the strong performance of U.S. markets should boost U.S. stock holdings.

The firm projects total trading volume to increase 11% quarter-over-quarter to HKD3.6 trillion with annualized trading velocity remaining elevated at 19.5x amid volatile markets. Interest income is expected to rise 9% quarter-over-quarter to HKD2.3 billion, with higher securities lending rates offsetting the impact of lower HIBOR.

BofA anticipates Futu’s total revenue will grow 10% quarter-over-quarter to HKD5.2 billion, with GAAP and non-GAAP net profit increasing 10-11% quarter-over-quarter to HKD2.37 billion and HKD2.45 billion, respectively, despite a projected 2 percentage point decline in gross margin to 82%.

In other recent news, Futu Holdings reported a significant increase in its first-quarter earnings, with profits more than doubling compared to the previous year. This impressive growth was attributed to a rise in trading volume and an increase in funded accounts. In response to these strong earnings, Jefferies raised its price target for Futu to $139, maintaining a Buy rating, while Morgan Stanley (NYSE:MS) increased its target to $140, citing robust earnings and a positive outlook for the second quarter. Morgan Stanley also highlighted a 4% increase in projected client assets for 2025, despite a reduction in net interest income forecasts due to changes in the Hong Kong Interbank Offered Rate.

Additionally, Barclays (LON:BARC) initiated coverage on Futu Holdings with an Overweight rating and set a price target of $176. The firm drew comparisons between Futu and other major financial platforms like Robinhood (NASDAQ:HOOD) and Coinbase (NASDAQ:COIN). Meanwhile, Morgan Stanley further adjusted its price target to $160, emphasizing Futu’s competitive advantage in the cryptocurrency sector. These developments reflect growing confidence among analysts in Futu’s performance and potential for future growth.

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