Hub24’s 75% increase in profit was in line with expectations. Management’s funds under administration target for end-FY21 remains unchanged and is on track. Increased flows year to date are being driven by advisors coming on board, the broker notes.
The near term risk remains that of pressure on rates paid on cash balances if the RBA cuts to below 0.5%, the broker warns. Longer term the broker expects Hub24 to scale successfully and deliver strong earnings growth. Add retained, target falls to $13.15 from $13.35.
Sector: Diversified Financials.
Target price is $13.15.Current Price is $10.43. Difference: $2.72 – (brackets indicate current price is over target). If HUB meets the Morgans target it will return approximately 21% (excluding dividends, fees and charges – negative figures indicate an expected loss).
