Hargreaves Lansdown: #1 U.K. DIY Investor Platform Still on Sale (Substack Exclusive)

Company Update (HL/ LN)

Summary

• HL shares remain 31% below their pre-Woodford peak in May 2019, due to what we believe to be temporary headwinds

• AUA growth has averaged 15% since FY15, but lower in recent years due to younger new clients and weak flows in HL Funds

• Low interest rates will also hit Cash revenues. However, AUA will be much larger in the long term, and the revenue margin will recover

• There is an opportunity to manage costs better; Cost Per Client has been flat and Cost / AUA has been worsening

• With shares at 1,677p, we expect an exit price of 2,489p and a total return of 61% (14.3% annualized) by 2024 year-end. Buy