RBC Capital Markets cuts Aberdeen Asset Management price target
RBC Capital Markets cut its price target for Aberdeen Asset Management to 440p from 455p after it revised its estimates following the company’s first-half results out on Tuesday.
Aberdeen Asset Management
317.60p
17:09 11/08/17
Financial Services
14,075.11
17:09 19/04/24
FTSE 100
7,895.85
16:59 19/04/24
FTSE 350
4,341.08
17:09 19/04/24
FTSE All-Share
4,296.41
17:08 19/04/24
“Our core concerns remain ongoing high margin net outflows and the investment performance of key funds which are lagging benchmarks,” RBC added.
The broker said that while the results were more or less in line with its expectations, net outflows were worse than it had estimated.
“As a result, the revenue yield was also lower than we anticipated,” noted RBC.
RBC trimmed its fiscal year 2015 earning per share (EPS) estimate to 32.5p from 32.7p and its 2016 estimate to 37.3p from 38.4p.
The bank continues to believe that management is capable of generating shareholder value over the much longer-term. “They have navigated the business through much worse situations than they are currently experiencing,” it said.
However, in the short to medium-term, it pointed out that the business is challenged by both weak investment performance and net outflows from its higher margin equity products.
“We are not confident that these forecast reductions are our last and we simply believe that more attractive investment opportunities exist elsewhere in our coverage universe.”
RBC rates the stock at underperform.