JPMorgan Upgrades Futu Holdings Limited to Overweight By


JPMorgan analysts upgraded Futu Holdings Limited (NASDAQ:) from Neutral to Overweight with a price target of $92.00 (from $62.00).

The analysts comment: “Futu has rallied 41% in the past three months, outperforming the NASDAQ by 38ppt. But we see further upside to the stock, for the following reasons. First, we see upside risk to Futu’s EPS due to strong client growth, asset flow and transaction volume. Second, our analysis suggests positive correlation between Futu’s PE multiple and its new client growth. We believe the recovery in new paying clients growth (200% in 1Q24 vs -8% in FY23) will drive further re-rating. Third, valuation is still undemanding: Futu currently trades at 16.1x PE, vs historical mean of ~25x or ~23x when its new paying client growth was 0% to 100% (+79% in 2024). We raise 24e-26e EPS by 7%/15%/16%. Despite Futu’s positive comment on its Crypto business, which will be launched in mid-2024, we factor in zero contribution to its EPS and PE multiple, thus there could be upside risk. Our end-24 PT of $92 suggests 24e PE of 18x and ~23% upside to the current share price. We upgrade the stock to OW.”

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