What Happened?
Shares of independent financial services firm LPL Financial (NASDAQ: LPLA) fell 5.2% in the morning session after Rothschild & Co Redburn downgraded the stock to Neutral from Buy and slashed its price target.
The analyst firm cut its price view on the shares to $390 from a previous target of $460, signaling a less optimistic outlook on the company's future performance. This negative assessment appeared to overshadow recent positive operational updates from LPL Financial. Specifically, the company had just reported that its total advisory and brokerage assets swelled to $2.26 trillion. This large jump was fueled primarily by the acquisition of Commonwealth Financial Network, which added a substantial $275 billion in net new assets. Despite this strong growth in assets under management, the analyst downgrade weighed more heavily on investor sentiment, sparking the morning sell-off.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy LPL Financial? Access our full analysis report here, it’s free.
What Is The Market Telling Us
LPL Financial’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock dropped 6.3% on the news that a broad market sell-off triggered by a dismal August jobs report that signaled a slowing economy.
The U.S. economy added only 22,000 nonfarm payrolls, a figure substantially below the forecasted 75,000, while the unemployment rate ticked up to 4.3%, its highest level since 2021. This unexpected weakness in the labor market led to a downturn in major indices like the S&P 500 and Dow Jones Industrial Average.
LPL Financial is down 1.3% since the beginning of the year, and at $323.68 per share, it is trading 18.9% below its 52-week high of $399 from July 2025. Investors who bought $1,000 worth of LPL Financial’s shares 5 years ago would now be looking at an investment worth $4,229.
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