Citi sees potential for Hub24 on expansion strategies, cuts PT on cost worries

Hub24

21/06/2022 01:37

** Citi sees Australian data solutions co Hub24's  HUB.AX 
strategy on expanding its services to advisers and end clients
playing out positively, but sees higher costs weighing in on
earnings 
    ** Brokerage maintains a "buy" rating on HUB but slashes
price target by 15% to reflect higher cost margins 
    ** Says HUB's move from a 'just investment' platform to
helping with the implementation of advice improves adviser
efficiency through new features, helping co increase share of
the custody platform market over time  
    ** Citi lowers HUB's funds under administration forecast for
FY24 by 3% to 5% to reflect weaker 2022 fourth quarter flows and
negative market movement 
    ** Brokerage slashed HUB's FY23 flow forecasts to A$11.7
bln, which is towards the lower-end of co's guidance range of
A$11 bln - A$14 bln noting weakness could continue into H123
    ** Eight of ten analysts rate the stock "buy" or higher, and
two rate it "hold"; their median PT is A$30.45 - Refinitiv data
    ** HUB down 34.6% this year, as of last close, vs a 12.8%
decrease in the S&P/ASX 200 index  .AXJO  

 (Reporting by Roushni Nair in Bengaluru)
 ((Roushni.Nair@thomsonreuters.com;))