Source: Davit Kirakosyan
LPL Financial Holdings (NASDAQ:LPLA) shares rose more than 3% intra-day today after Wells Fargo analysts upgraded the company to Overweight from Equal Weight, setting a new price target of $285, up from $235. The analysts highlighted improved risk/reward dynamics for LPL, particularly following recent adjustments to its sweep cash rates, which have alleviated some investor concerns. LPL’s recent valuation contraction makes it comparatively attractive to its peers, according to the analysts. In the bank’s September initiation report, sweep cash pricing was identified as a primary concern. However, LPL’s decision to lower sweep rates in late September 2024 is seen as a “significant positive move,” signaling a reduced likelihood of downside risk from regulatory and competitive pressures. While the analysts stop short of calling it an “all-clear” for LPL, they view this change as a critical step toward a more favorable outlook, enhancing both base and upside potential for the company.
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