NEW YORK (TheStreet) -- Shares of LPL Financial Holdings Inc. (LPLA) - Get LPL Financial Holdings Inc. Report are down -2.79% to $47.73 on Thursday after UBS (UBS) - Get UBS Group AG Report cut the brokerage and investment advisory services' price target to $53 from $54.
"Our estimates are coming down on lower activity levels and higher expenses, and we would not be surprised to see some weakness in the shares this morning," UBS said.
The firm also lowered LPL Financial Holdings' full year 2014 EPSe to $2.40 from $2.51 and its full year 2015 EPSe to $2.67 from $2.71.
"Our estimate comes down as lower commissions and higher expenses carry through into next year," the firm added.
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TheStreet Ratings team rates LPL FINANCIAL HOLDINGS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate LPL FINANCIAL HOLDINGS INC (LPLA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 15.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, LPL FINANCIAL HOLDINGS INC's return on equity exceeds that of both the industry average and the S&P 500.
- LPL FINANCIAL HOLDINGS INC has improved earnings per share by 26.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LPL FINANCIAL HOLDINGS INC increased its bottom line by earning $1.72 versus $1.37 in the prior year. This year, the market expects an improvement in earnings ($2.70 versus $1.72).
- The net income growth from the same quarter one year ago has exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income increased by 20.3% when compared to the same quarter one year prior, going from $36.94 million to $44.42 million.
- Powered by its strong earnings growth of 26.47% and other important driving factors, this stock has surged by 42.11% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: LPLA Ratings Report