Shore Capital has a “sell” rating on the investment manager. In spite of a 50 per cent rise in the firm’s share price since the summer, the broker still believes the firm has overstretched on its new strategy, yet the share price already assumes the plan will succeed. Shore Capital expects cost forecasts to rise, and Brewin looks expensive compared to peers such as Rathbones.
Morgan Stanley has upgraded the asset manager to “overweight” and changed its target price from £16.65 to £22.50. The broker sees Schroders as the best relative play on European risk recovery in a sector already lifted by improved markets, and has raised its earnings estimates to around 10 per cent ahead of consensus. Morgan Stanley has also cut rival Ashmore to an “equalweight” rating.
UBS has added Man Group to its “most preferred” list following a change of leadership at the asset manager at the end of last year. The broker thinks the firm could reveal a change in direction alongside its full-year results on 28 February that could give the share price a bump. “Long term, we believe a sale of the company is a possibility,” UBS adds.