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BofA Securities Reiterates a "Buy" Rating on Futu Holdings, Raising the Price Target to $90.00

Moomoo News ·  Sep 27 12:01

BofA Securities reiterates a "Buy" rating on $Futu Holdings Ltd (FUTU.US)$  with a price target of $90.00, lifting the target P/E multiple from 16x to 18x.

BofA Securities highlights the following points:

  • Positive Policies: Following a positive policy surprise, the potential for asset reallocation after Fed rate cuts, along with the recent HK market rally, could further boost the company's client asset inflows and trading activities. As a result, the target P/E multiple has been raised to 18x for 2024-2026 earnings estimates.

  • Mitigation Levers for Fed rate cuts: In 2Q24, Futu guided that every 25bp rate cut would lower its pre-tax operating profit by HKD 5-8 million per month, which aligns with estimates. BofA Securities' model factors in 250bp in Fed rate cuts during 3Q24-4Q25, but Futu Holdings is expected to mitigate these impacts through 10% growth in client assets, a 1.0x increase in trading velocity, or a 0.6bp increase in commission rate.

Price Objective Risk:

  • Upside risks: better-than-expected capital market condition, lower-than-expected competition and faster-than-expected client growth.

  • Downside risks: stricter-than-expected regulation, major downturn in US/HK and intensified competition.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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