On Tuesday, Jefferies, a global investment banking firm, updated its outlook on NASDAQ:FUTU, the stock of Futu Holdings (NASDAQ:FUTU) Limited, by increasing the price target to $109.20 from the previous target of $88.40. The firm has also reiterated its Buy rating for the stock.
The adjustment follows the release of Futu's third-quarter results, which showcased revenues surpassing both the consensus and Jefferies' own forecasts. However, the company's non-GAAP net profit fell slightly short of consensus expectations by 1.2%, attributed mainly to unrealized foreign exchange losses resulting from a modest appreciation of the Chinese renminbi during the quarter.
In the first nine months of 2024, Futu Holdings Limited has managed to add approximately 487,000 new paying clients. The company now anticipates that its full-year growth will comfortably surpass the previously issued guidance of 550,000 new clients. Additionally, Futu has announced a special cash dividend of approximately $280 million to its shareholders.
The analyst's commentary highlighted a notable uptrend in trading volumes for Hong Kong shares and China ADRs. This trend, along with the robust client growth and the company's financial performance, supports the firm's decision to maintain a Buy rating on Futu's stock.
In other recent news, Futu Holdings Limited has seen a flurry of activity from various analyst firms. Citi has downgraded Futu Holdings from Buy to Neutral, despite raising its price target to $95, following the company's announcement of a record-high quarterly non-GAAP net profit after tax for Q3 2024. This robust financial performance was driven by a significant surge in trading volume and a continuous rise in net interest income. In the same quarter, Futu Holdings also declared a special cash dividend, a first in the company's history.
Morgan Stanley (NYSE:MS) has upgraded Futu Holdings from Equalweight to Overweight, reflecting confidence in the company's expansion, particularly in Singapore. The firm anticipates that inflows from overseas markets will account for a significant portion of Futu Holdings' total inflows in the coming years. Deutsche Bank (ETR:DBKGn) and JPMorgan have also upgraded their price targets for Futu, citing resilient trading volumes and stable commissions.
BofA Securities has raised its price target by 20% to $108.00, reflecting revised earnings estimates and increased valuation multiples. The firm pointed to the potential for asset reallocation into stock markets following the Federal Reserve's rate cut and recent market rallies as factors that could further enhance client asset inflows and trading activities for Futu.
Lastly, JPMorgan significantly hiked its target from $88.00 to $160.00, maintaining an Overweight rating due to improving retail sentiment in Hong Kong and mainland China.
InvestingPro Insights
Futu Holdings Limited's recent performance aligns with several key metrics and insights from InvestingPro. The company's strong client growth and financial results are reflected in its market performance, with InvestingPro data showing a remarkable 54.94% price total return over the past year and an even more impressive 68.95% year-to-date return.
InvestingPro Tips highlight that Futu has been "profitable over the last twelve months" and "analysts predict the company will be profitable this year," which supports Jefferies' bullish stance. The company's P/E ratio of 22.14 suggests that investors are willing to pay a premium for its growth prospects, although an InvestingPro Tip cautions that it's "trading at a high P/E ratio relative to near-term earnings growth."
For investors seeking more comprehensive analysis, InvestingPro offers 8 additional tips that could provide deeper insights into Futu's financial health and market position.
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