Hargreaves Lansdown share price buoyed by cash deposit hopes

Hargreaves Lansdown’s (LON:HL) share price has been underpinned by growing optimism about the company’s plans to launch a cash savings service in the second half of the year.

Shore Capital has turned positive on Hargreaves, based in part on the financial services group’s intention to add bank accounts to its Vantage platform, which allows customers to trade funds from a wide variety of managers via a single login. The broker yesterday upgraded its recommendation from ‘hold’ to ‘buy,’ citing the plan’s “huge potential to attract new money to the platform.”

Analyst Paul McGinnis said in a note to clients: “The deposit service shares similarities with the way that the platform market changed the way that funds were bought and sold. Existing Hargreaves Lansdown Vantage clients hold significant cash savings at banks. We think investors could be seriously underestimating the convenience factor offered by the service and we incorporate a revenue stream for cash savings for the first time.” McGinnis added that the negative share price reaction which came following the interim results along with wider market weakness offer “a rare opportunity to invest in what we view as one of the highest quality business models anywhere in the UK market”.
Underpinned by the upbeat comment, Hargreaves Lansdown’s share price rose over four percent yesterday. By 13:36 GMT, the group had extended the gains, trading 0.51 percent up at 1,182.00p. The FTSE 100 index had meanwhile increased by 0.49 percent to stand at 5,852.89 points.
As of 13:51 GMT, Tuesday, 16 February, Hargreaves Lansdown PLC share price is 1,182.00p.