Netwealth, trading 7.7% higher yesterday, is a leading investment platform for financial advisers, a different business to both MFG and PPT but it enjoyed the buying across the sector yesterday which also saw HUB24 (+5.4%) enjoy a good day at the office.
We covered NWL’s 1H result here, and they followed up this solid result with a quarterly trading update in April, which was better than feared, with stronger-than-expected net inflows, suggesting advisers remained active despite a more challenging macro backdrop. While higher interest rate expectations and volatile equity markets remain a near-term risk, revenue trends continue to be supported by higher cash balances and increased trading activity.
- We see no reason to buy into platform providers at this stage of the cycle, but note NWL is trading at a deep discount to its historical average valuation.
MM is neutral towards NWL around $22
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