Are LPL shares heading to $300?
After LPL Financial Holdings Inc. said Tuesday thatit was buying broker-dealer network Atria Wealth Solutions Inc. for a base price of $805 million, the company’s shares popped.
The market, and some securities analysts who follow LPL Financial, apparently liked the news of the latest acquisition by LPL, which has done dozens of deals in its history.
The price of the firm’s shares (LPLA) hit a 52-week high of $263.34 Tuesday before retreating and closing for the day at $257.80.
But the earnings potential that Atria’s 2,400 financial advisors and $100 billion in assets could eventually bring to LPL, once they move in 2025, sharply struck one analyst, who raised his share price for LPL Financial above $300 per share.
That would be an undeniable milestone for a company that hadits initial public offering in 2010 on the Nasdaq at a price of $30.
LPL Financial executives have a history of not commenting publicly on the company’s share price. But they must have been heartened privately when Steven Chubak, managing director at Wolfe Research, wrote in a note Tuesday afternoon that his price target for LPLA shares increased to $306 from $295, or an upside of 20% based on the day’s trading, after including Atria’s financial contributions.
Chubak focused in particular on the low percentage – about 20% – of Atria advisors’ client assets in advisory accounts, which charge annual fees, with the remainder in accounts that charge commissions. The broad financial advice industry has been moving to charging more clients fees over the past two decades because such fees represent steady annual revenue and income for the firm.
“Atria has a relatively low advice penetration, which LPLA expects to accelerate towards its current advice
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