City broker downgrades St James’s Place despite robust inflows
RBC has downgraded St James’s Place’s target stock price, while Quilter and Rathbones both received upgrades.
RBC analyst Ben Bathurst downgraded his price target on Britain’s largest wealth manager from 1,100p to 1,050p today.
St James’s Place’s stock price underperformed today on the news, falling more than two per cent compared to a decline of less than one per cent for the wider market.
Bathurst justified the downgrade due to softer global markets in recent weeks, which are likely to impact the performance of and new money coming into St James’s Place’s funds.
The analyst cut net flow forecasts for this year by five per cent, as he expected poor retail sentiment and a decline in pension sales in the second half of the year.
Bathurst downgraded earnings expectations for St James’s Place by two per cent in 2026 and six per cent in 2027 as a result, as well as expecting net cash to be six per cent below target by 2030.
“Despite this headwind we still expect clear positive net flows each quarter – which we see as important for sentiment towards St James’s Place shares,” he added.
St James’s Place’s stock price has doubled in the last year after a surprising turnaround for the wealth giant, but has been struggling since mid-February, falling 17.5 per cent.
Quilter and Rathbones
Meanwhile, RBC also upgraded the target prices of St James’s Place competitors Quilter and Rathbones, moving the latter to an ‘outperform’ rating.
With news last month that Rathbones CEO Paul Stockton was set to retire later this year, Bathurst noted: “Timely arrival of new management offers an opportunity for further strategic progression”.
The wealth manager is also currently trading at a material discount to its peers, at just 9.6 times expected earnings, compared to a 12.9 times average to the sector.
After Rathbones merged with Investec Wealth and Investment, full integration between the two firms is quickly approaching, which should boost efficiency, added the analyst.
“Asset gathering has been depressed through the integration process but we expect a return to positive net flows from the second half of 2025 onwards, which we would expect to be supportive to sentiment, and by extension market rating,” said Bathurst.
In addition, Quilter’s stock price target was upgraded from 160p to 180p by the analyst, thanks to “recent positive messaging” in the wealth manager’s full-year results and an increasing dividend.