Berenberg cuts Standard Life to 'sell', says cost base too high
Berenberg downgraded shares of Standard Life from ‘hold’ to ‘sell,’ saying its cost base remains too high.
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16:45 10/05/24
FTSE 100
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Life Insurance
6,144.54
17:09 10/05/24
The bank retained a price target for the stock of 400p. Shares in Standard Life were trading 0.54% lower to 462.80p as of 1352 BST.
Berenberg estimated 10% earnings per share compound annual growth rate out to 2017, but was below consensus in its forecast for earnings per share over the next three years.
“While we continue to believe that Standard Life will emerge from the shake-up in the UK life industry, we expect the next few years to be more challenging from an earnings perspective than consensus expectations suggest,” the broker said in a note.
Berenberg said it expected Standard life as a winner in the “new-world” UK savings space, but believed its cost base was high and would come under pressure.
With a strong balance sheet, Standard Life management could add further scale through acquisition, which would relieve cost pressures, Berenberg said.