** Shares of wealth platforms Netwealth Group NWL.AX and Hub24 HUB.AX rise 1.8% and 0.7%, respectively
** Earlier in the day, NWL rose as much as 3.7% to A$37.98, hitting a record high
** Morningstar increases fair value estimate for HUB and NWL, saying it reflects a lowered cost of equity assumption
New TP | Old TP | |
Netwealth | A$40 | A$31 |
Hub24 | A$15.2 | A$12.3 |
** Expects both cos to overtake wealth manager Insignia IFL.AX as the largest platform operator(s) by FY30
** Also, expects five-year EBITDA margins avg of 41% and 52% for HUB and NWL respectively, which is above their peers
** However, warns market optimism may overlook rising competition and the substantial investment needed for new flow wins, which aren't fully captured in margin expectations
** So far this year, NWL and HUB are up nearly 30% and 50% respectively
(Reporting by Kumar Tanishk in Bengaluru)
((Tanishk.Kumar@thomsonreuters.com; X: @thatstanishk http://www.x.com/thatstanishk;))