William Blair says the recent pullback in LPL Financial has created a "great entry point" for a leading wealth management franchise that is seeing "record" earnings momentum from rising interest rates, strong organic growth, and high capital return. The current outlook on LPL is "overly bearish" and assumes interest rates will start declining soon due to bank liquidity concerns, the analyst tells investors in a research note. In contrast, Blair expects interest rates to remain "higher for longer" given the "reflexive linkage" between price and wage inflation. This suggests spread income should continue accelerating in 2023, driving record earnings in 2023 and 2024 for LPL, contends the firm. It suggests investors buy the stock now before tighter monetary conditions prevail.
Published first on TheFly
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