We touched on HUB earlier in the week after they delivered a strong second-quarter result, with total Funds Under Administration (FUA) reaching a record $120.9 billion. There are several structural tailwinds underpinning growth of independent platforms and it remains a sector with a big future. HUB, relative to their competition such as Netwealth (NWL) and Praemium (PPS) are also executing particularly well, attracting new advisers who bring funds onto the platform.
Further, cash rates have remained higher for longer, and with platforms making a margin on cash held, higher interest rates have been a positive for this component of their earnings. While the trends here are very positive, and frustratingly, we ran the numbers on HUB into its recent pullback to ~$65, we don’t view the risk/reward as compelling above $75, although we would not be surprised to see the current momentum continue.
- We can see HUB testing/breaking the psychological $80 level in the coming weeks, a positive read through for the ASX more broadly.
MM is cautiously bullish toward HUB
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