LPL Financial Earnings: Interest-Rate Headwinds Likely Delayed for an Extended Period

Narrow-moat-rated LPL Financial finished the year strong, and its interest-rate headwinds have potentially been delayed for an extended period. The company reported net income to common shareholders of $271 million, or $3.59 per diluted share, on $1.2 billion of gross profit in the fourth quarter. Gross profit increased 22% from the previous year and 9% sequentially, with strength in revenue lines tied more to client assets bolstering the relatively low growth in client cash-related revenue. We don’t anticipate making a material change to our $357 fair value estimate. We assess the shares as fairly valued.