Hargreaves Lansdown still a 'buy' despite short-term challenges

14th Oct 2014 10:31

Financial services group Hargreaves Lansdown is still worth a 'buy' for its long-run prospects, but the short-term outlook is less certain, according to Peel Hunt.The company's first-quarter trading update on Tuesday was more or less as expected, the broker said, with assets under administration at £47bn by 30 September.The broker said that this was "very marginally higher" over the three months, improving by just £0.1bn, as negative market movements partly offset inflows of £1bn."This demonstrates the robustness of Hargreaves' growth, given weak market conditions over the summer and the macro uncertainties impacting investor activity," said Peel Hunt's Stuart Duncan.Nevertheless, he said that he expected to reduce his full-year profit forecast of £243.6m by around 5% to £230m which is "more in keeping with consensus"."We continue to believe that the strength of Hargreaves' offering will help it retain its leading market position, albeit that revenue trends in the short term remain more challenging," Duncan said."We retain our 'buy' recommendation, although we recognise the negative sentiment in the short term," he said.The broker kept its 1,345p target price for the stock, which was down 2.9% at 849.5p by 10:37.