LPL Financial (NASDAQ:LPLA) Stock Jumps 4.4% - Should You Buy?

Key Points

• LPL Financial shares rose 4.4% to about $316.23, though trading volume was roughly 90% below the average session.
• Analyst sentiment remains favorable: 12 analysts rate the stock a Buy and four a Hold, producing a “Moderate Buy” consensus and an average price target of $407.
• LPL exceeded quarterly expectations, reporting $5.84 in EPS versus the $5.39 estimate and $5.19 billion in revenue, up 35.2% year over year. The company also pays a $0.30 quarterly dividend, while recent insider activity has consisted of stock sales.

Shares of LPL Financial Holdings Inc. (NASDAQ:LPLA - Get Free Report) traded up 4.4% during trading on Friday. The stock traded as high as $316.47 and last traded at $316.2310. 88,430 shares changed hands during trading, a decline of 90% from the average session volume of 897,253 shares. The stock had previously closed at $302.76.

Analyst Upgrades and Downgrades

A number of equities research analysts have commented on LPLA shares. JPMorgan Chase & Co. raised their price target on LPL Financial from $408.00 to $428.00 and gave the company an "overweight" rating in a report on Friday, July 31st. Keefe, Bruyette & Woods increased their target price on LPL Financial from $365.00 to $390.00 and gave the stock an "outperform" rating in a research report on Friday, July 31st. Barclays lifted their target price on LPL Financial from $394.00 to $401.00 and gave the company an "overweight" rating in a research note on Friday, July 31st. Truist Financial assumed coverage on shares of LPL Financial in a report on Tuesday, September 1st. They set a "hold" rating and a $389.00 price objective for the company. Finally, Weiss Ratings reissued a "hold (c)" rating on shares of LPL Financial in a report on Friday, July 24th. Twelve analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company's stock. Based on data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average price target of $407.00.

LPL Financial Stock Performance

The business has a 50 day moving average of $348.86 and a 200 day moving average of $317.35. The company has a market capitalization of $24.75 billion, a P/E ratio of 25.12, a price-to-earnings-growth ratio of 0.52 and a beta of 0.48. The company has a quick ratio of 2.39, a current ratio of 2.39 and a debt-to-equity ratio of 1.30.

LPL Financial (NASDAQ:LPLA - Get Free Report) last released its quarterly earnings data on Thursday, July 30th. The financial services provider reported $5.84 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $5.39 by $0.45. The business had revenue of $5.19 billion for the quarter, compared to the consensus estimate of $5.04 billion. LPL Financial had a return on equity of 32.20% and a net margin of 5.13%.The company's revenue was up 35.2% compared to the same quarter last year. During the same quarter in the previous year, the company posted $4.51 EPS. On average, sell-side analysts predict that LPL Financial Holdings Inc. will post 24.06 earnings per share for the current year.

LPL Financial Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Friday, August 28th. Investors of record on Friday, August 14th were given a $0.30 dividend. This represents a $1.20 annualized dividend and a yield of 0.4%. The ex-dividend date was Friday, August 14th. LPL Financial's payout ratio is currently 9.57%.

Insider Buying and Selling at LPL Financial

In other news, Director Matthew Enyedi sold 1,000 shares of the company's stock in a transaction dated Friday, July 31st. The shares were sold at an average price of $352.72, for a total transaction of $352,720.00. Following the sale, the director directly owned 13,121 shares in the company, valued at approximately $4,628,039.12. This represents a 7.08% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Greg Gates sold 4,119 shares of the stock in a transaction dated Thursday, August 20th. The shares were sold at an average price of $355.38, for a total transaction of $1,463,810.22. Following the completion of the transaction, the director directly owned 23,602 shares of the company's stock, valued at approximately $8,387,678.76. The trade was a 14.86% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 5,867 shares of company stock worth $2,079,664 over the last three months. 0.60% of the stock is owned by company insiders.

Institutional Investors Weigh In On LPL Financial

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. BlackRock Inc. bought a new position in shares of LPL Financial during the 2nd quarter valued at approximately $1,333,189,000. Jupiter Topco LLC purchased a new position in LPL Financial during the second quarter worth $1,182,595,000. Janus Henderson Group PLC boosted its stake in LPL Financial by 8.6% during the first quarter. Janus Henderson Group PLC now owns 3,666,780 shares of the financial services provider's stock worth $1,103,079,000 after buying an additional 289,227 shares during the period. Capital World Investors increased its position in LPL Financial by 37.9% during the fourth quarter. Capital World Investors now owns 3,625,357 shares of the financial services provider's stock valued at $1,294,869,000 after acquiring an additional 996,806 shares during the last quarter. Finally, Principal Financial Group Inc. raised its stake in shares of LPL Financial by 36.3% in the first quarter. Principal Financial Group Inc. now owns 2,636,544 shares of the financial services provider's stock valued at $793,163,000 after acquiring an additional 702,061 shares during the period. 95.66% of the stock is currently owned by hedge funds and other institutional investors.

About LPL Financial

LPL Financial Holdings Inc NASDAQ: LPLA is the parent company of LPL Financial LLC, an independent broker-dealer and registered investment adviser that provides services and support to financial advisors. Rather than operating primarily through a proprietary branch network, LPL enables independent financial professionals, registered investment advisers, and advisors affiliated with banks and credit unions to operate their own practices while accessing investment products, technology, and business resources.

The company's platform supports brokerage and fee-based advisory services, retirement plan services, insurance and annuity products, alternative investments, cash management, research, compliance, and practice management.

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