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