Credit Suisse Downgrades LPL Investment (LPLA) to Neutral

August 22, 2016 6:54 AM EDT
Get Alerts LPLA Hot Sheet
Price: $30.63 -0.33%

Rating Summary:
    1 Buy, 14 Hold, 4 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 14 | Down: 11 | New: 8
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Credit Suisse downgraded LPL Investment (NASDAQ: LPLA) from Outperform to Neutral and maintained a price target of $28.00, citing more balanced risk/reward.

Analyst Christian Bolu commented, ". With shares at our target price and now trading in line with the peer group (LPLA at 14x 2017 consensus EPS in line with RJF/ETFC), we downgrade shares to Neutral from Outperform. Our thesis when we upgraded the stock in February (see "Moving Past an Unforced Error; Upgrade to Outperform") was predicated on what we believed to be overblown investor concerns around leverage levels and the underappreciated inflection towards higher margin/multiple advisory businesses. We now believe leverage concerns have mostly faded given a more conservative capital management stance and continued solid free cash flow generation. With regard to business inflection, while we believe this part of our thesis still has legs to run – in 2Q advisory assets grew +5% yr/yr vs. brokerage -2% – we think it's prudent at current valuations to acknowledge some of the longer term structural risks facing the company/industry (DoL, price compression, the shift from active to passive investing)."

For an analyst ratings summary and ratings history on LPL Investment click here. For more ratings news on LPL Investment click here.

Shares of LPL Investment closed at $28.34 yesterday.

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