Broker snap: Credit Suisse downgrades Hargreaves Lansdown

16th Oct 2012 09:28

Credit Suisse analysts have downgraded Hargreaves Lansdown to 'underperform' from 'neutral' but have raised their price target for the stock from 480p to 655p.The Swiss bank accepts that Hargreaves Lansdown should trade at a premium to traditional asset managers, given the lack of investment performance risk and higher retention of assets resulting in stronger growth in assets under management.However, it believes that the shares, trading at an all-time high (up 70% year-to-date), and on a calendar year price earnings ratio of 23 are up with events. Moreover, the regulatory uncertainty from the retail distribution review has the potential to disrupt the current pricing model, consume management time and raise operational costs.CM