Credit Suisse Downgrades Lufax Holding Ltd (LU) to Underperform

(Updated - November 25, 2022 4:09 AM EST)

Credit Suisse analyst Frank Zheng downgraded Lufax Holding Ltd (NYSE: LU) from Neutral to Underperform with a price target of $1.40 (from $1.70).

The analyst comments "Factoring in the miss of 3Q22 results and a weakened outlook for 4Q22 and FY23, we decrease loan volume estimates for FY22/23/24 by 11%/26%/19% to Rmb493/ 437/535bn. Further, we lower RCF take rate estimates by ~0.6/0.3/0.3pp. We cut FY22/23/24E EPS by 32%/47%/28%, primarily on lower revenue, partially offset by savings in expenses. Our DCF model derives a new TP at US$1.40 (from US$1.70), implying 3.1x/3.8x FY22/ 23E P/E. Lufax is trading at 3.9x/4.7x FY22/23E P/E. Downgrade to Underperform. Key upside risk: (1) faster-than-expected recovery of macro conditions; (2) more sizable stock buyback or dividend; and (3) lower delisting risk following the potential resolution of CN ADR's audit issue."

For an analyst ratings summary and ratings history on Lufax Holding Ltd click here. For more ratings news on Lufax Holding Ltd click here.

Shares of Lufax Holding Ltd closed at $1.75 yesterday.

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