Bank of America approves of Futu Holdings' operations
Futu Holdings, a leading online brokerage firm, is once again in the spotlight as Bank of America reaffirms its "Buy" rating for the company. The financial institution has raised its price target for Futu Holdings from $143.90 to an ambitious $172, indicating a potential for significant growth.
In issue 45/24, a buy recommendation for Futu Holdings was made, and those who followed the advice have already seen impressive returns. In less than a year, the stock has gained over 50%. This growth trajectory has continued, with the stock price increasing nearly 14% last week, mirroring the gains seen in our AKTIONÁR-Depot pick, Robinhood.
Despite a temporary correction of around 20% from its year-to-date high, the current stock price of Futu Holdings is close to its year-to-date high of $174.36. With Bank of America's new price target, Futu Holdings is now within striking distance of this high.
Bank of America's confidence in Futu Holdings is grounded in the company's strong fundamentals. The firm expects a 35% year-over-year increase in new paying clients, despite a projected 20% quarter-over-quarter decline. Total client assets are expected to rise 12-13% quarter-over-quarter, supported by robust asset inflows.
Moreover, the firm anticipates a 9% increase in interest income for Futu Holdings, with commission rates remaining largely stable. The momentum for Futu Holdings is currently on the bulls' side, with high-frequency data from July confirming a positive trend for the company, according to analysts.
However, it's not just Bank of America that sees potential in Futu Holdings. Other analysts also exhibit bullish sentiment, further validating BofA's positive outlook on the company. The strong inflows driving the expected increase in customer assets, coupled with sustained trading activity, are seen as drivers for continued upside potential in the stock.
In terms of financials, Bank of America anticipates a 10% increase in total revenue for Futu Holdings. However, they also project a 2% drop in the gross margin. Despite this, the overall positive outlook remains, with the company's growth in client assets and sustained trading activity expected to drive the upside potential.
In conclusion, Futu Holdings remains a clear buy, similar to Robinhood. With Bank of America's new price target, the company is within reach of its year-to-date high, offering a potential opportunity for investors. As always, it's important to conduct thorough research and consider individual investment objectives before making any investment decisions.
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