Forecasts for Hargreaves Lansdown PLC (LON:HRGV) have been cut by up to 10% by Credit Suisse (SIX:CSGN) following the investment platform's first-quarter update at the start of the week.
The update came just as the FTSE 100 group was hit by a £100mln lawsuit over the failure of fallen star manager Neil Woodford’s equity income fund.
The investment bank cut its share price target to 900p from 1,000p but maintained its 'neutral' rating.
After the trading statement, which also included news that chief executive Chris Hill is departing, Credit Suisse reduced its earnings forecasts by 4-10%, reflecting the reduction in cash yield forecast range and assumptions of an increase in UK corporation tax rate.
Cash yield expectations have been cut from 175-235 basis points to 150-200bp for the 2023 and 2024 fiscal years.
HL revised up its revenue yield guidance but the components were "lower than we had anticipated given UK rate trends", said the analysts, with guidance of 130-150bp for the current year was below its estimate of 175bp and so forecasts have been reduced accordingly.
At 17 times full year reported earnings, the analysts said "we see HL fairly valued for industry headwinds and strategic execution risk vs. incumbent market leading position".
Analysts at Barclays (LON:BARC) said net inflows of £0.7bn fell more than expected, but market movements were a lesser headwind than consensus expectations, with assets under administration and revenues ahead of consensus.
Barclays raised its estimates for the current year roughly 8% and its FY24 estimates by around the same 8% "to reflect the upgraded revenue guidance", maintaining its price target of 1,225p and 'overweight' rating.