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On Friday, Keefe, Bruyette & Woods analyst Kyle Voigt increased the price target for LPL Financial Holdings (NASDAQ:LPLA) to $405 from the previous target of $390, while reaffirming an Outperform rating on the company’s stock. Voigt’s adjustment follows LPL Financial’s earnings report, which revealed an adjusted earnings per share (EPS) that surpassed Keefe, Bruyette & Woods’ estimates by $0.04.
The EPS beat was attributed to a combination of factors, including a higher gross profit that contributed an additional $0.03 to the EPS, and a lower tax rate which added $0.17. With a current gross profit margin of 34.3% and strong revenue growth of 20.5% year-over-year, LPL Financial continues to demonstrate robust financial performance. These positive impacts were partially offset by an increase in operating expenses, which reduced the EPS by $0.09, along with higher interest expenses and a greater number of shares outstanding, which decreased the EPS by $0.04 and $0.03, respectively. For deeper insights into LPLA’s financial health and additional metrics, check out the comprehensive Pro Research Report available on InvestingPro.
Voigt highlighted that the primary driver behind the top-line (gross profit) beat was an increase in net commission and advisory fees, as well as cash sweep revenues. In response to these results, Keefe, Bruyette & Woods has raised its forward estimates for LPL Financial. The revised estimates take into account a slight increase in cash balances and a projection for lower expense growth moving forward.
The price target uplift to $405 from $390 is a reflection of the updated estimates and the firm’s continued confidence in LPL Financial’s performance. The Outperform rating indicates that Keefe, Bruyette & Woods expects LPL Financial’s stock to perform better than the average return of the stocks the firm covers over the next 12 months.
In other recent news, LPL Financial reported fourth-quarter earnings per share (EPS) of $4.25, exceeding the consensus estimate by 8%. The company’s adjusted EBITDA of $585 million also surpassed expectations. Goldman Sachs maintained its Buy rating and $405.00 price target for LPL Financial, while Citi raised its stock target to $415. JPMorgan upgraded LPL Financial’s stock rating and raised its target to $397, revising its 2026 earnings estimates upwards by approximately 10%.
The company’s cash balances ended the quarter at $55.1 billion, a 20% increase quarter-over-quarter. Total (EPA:TTEF) client assets reached $1.7 trillion at the end of the quarter, marking a 29% increase year-over-year. LPL Financial has also been expanding its workforce and asset base, acquiring Atria Wealth Solutions and planning to onboard the wealth management businesses of Prudential (LON:PRU) Financial (NYSE:PRU) and Wintrust Financial (NASDAQ:WTFC) by early 2025.
On the regulatory front, LPL Financial agreed to pay an $18 million civil penalty to the Securities and Exchange Commission due to issues with its anti-money laundering program. LPL Financial and Wells Fargo (NYSE:WFC) each agreed to pay a $900,000 penalty to the SEC for providing incomplete and inaccurate securities trading data. The company also settled with its former CEO, Dan H. Arnold, allowing him to retain stock options valued at approximately $12 million.
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