, an analyst from BMO Capital, has initiated a new Buy rating on LPL Financial (LPLA).
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BMO Capital’s rating is based on LPL Financial’s strong growth potential at a reasonable price, which makes it an attractive investment opportunity. Despite the challenges posed by increased competition in recruiting financial advisors, LPL Financial has demonstrated industry-leading growth in net new assets (NNA), with a notable compound annual growth rate (CAGR) of 12% over the past three years. This growth is expected to continue, with projections of 11% NNA growth in 2025 and 8-9% annually through 2027.
BMO Capital also highlights LPL Financial’s aggressive expansion in financial advisor loans, which has outpaced its peers, indicating a strong recruitment strategy. Although there are efficiency trade-offs, the company’s valuation remains appealing relative to its growth profile, positioning it as a compelling growth at a reasonable price (GARP) play. While there are concerns about rate risks and client cash growth forecasts, LPL Financial’s ability to execute its strategy effectively reinforces confidence in its potential to sustain momentum in the market.
In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $460.00 price target.