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Highlights

  • Morgan Stanley upgrades Netwealth to "Overweight" amid market share growth.

  • Price target lowered to AU$29.75, with FY25-27 EPS forecasts cut by ~1% due to market headwinds.

  • Stock seen as long-term opportunity despite 21% decline from recent highs.

Shares of financial services firm Netwealth Group Ltd (ASX:NWL) rose as much as 1.6% to AU$25.86 on Monday, following a rating upgrade from Morgan Stanley which cited the company's continued market share gains and resilient financial performance.

The U.S.-based brokerage upgraded its stance on the independent wealth platform provider from "equal-weight" to "overweight," expressing confidence in Netwealth’s long-term growth trajectory. Analysts highlighted the firm's ability to expand in a competitive environment dominated by specialist platforms.

However, despite the upbeat sentiment, Morgan Stanley adjusted its price target for the stock downward from AU$31.25 to AU$29.75. The revision reflects a modest reduction of around 1% in the brokerage’s earnings per share (EPS) forecasts for the financial years 2025 to 2027. The downgrade in earnings expectations is attributed to recent negative market movements and elevated cost pressures.

“We view the recent 21% decline in Netwealth’s stock—compared to an 11% fall in the broader market index—as an attractive entry point for investors,” the analysts noted in their report. “Despite short-term market volatility, the fundamentals of the company remain strong, and we expect it to continue on a steady growth path.”

So far in 2025, Netwealth shares have declined approximately 10.5%, including today’s session. This underperformance has not dampened overall sentiment among analysts, with most rating the stock at "hold" or above. According to data from LSEG, the median price target for NWL shares currently stands at AU$28.20.

The platform provider has gained recognition for its digital-first approach and consistent inflows, particularly from independent financial advisers who value flexibility and transparency in wealth management solutions.