Schroders and Aberdeen: RBC downgrades price targets
RBC Capital Markets has downgraded the stock price targets of Schroders and Aberdeen ahead of the publication of quarterly results from the wealth managers.
Schroders was downgraded from 475p to 390p by the investment bank, compared to a current stock price of 322p, as RBC cut forecasts for operating profit by eight per cent over the next three years.
“Earnings reductions are primarily driven by mark to market effects in the second quarter, coupled with negative operating leverage, as costs are relatively fixed in the short-term,” said RBC equity analyst Mandeep Jagpal.
Asset managers across the UK have been dinged hard by the volatility in markets over the last month, reporting hundreds of millions, if not billions, in lost assets thanks to poor performance.
London-based Schroders is not expected to have performed much differently, though Jagpal noted that only 27 per cent of its assets were in stocks, a lower proportion than its peers.
However, RBC still downgraded its forecasts for Schroders’ assets at the end of the first quarter and the end of 2025 by one per cent and four per cent respectively.
Analysts are expecting the investment giant to report £775bn in assets under management in a trading update later this week, compared to £779bn at the start of 2024.
Despite the expected drop in assets, forecasts also predict that Schroders will have brought in plenty of new investor cash, with current estimates sitting at £3.7bn over the quarter.
Schroders’ stock price has escaped the economic meltdown prompted by US president Donald Trump’s tariffs relatively unscathed, falling just 0.5 per cent since the start of 2025.
However, it is down more than 25 per cent over the last five years, as the asset management giant has struggled to keep institutional clients on board.
Meanwhile Aberdeen’s target stock price was also downgraded by RBC from 150p to 130p, while currently trading at 140p.
The Scottish asset manager, which is due to report results next week, had RBC operating profit forecasts slashed by 11 per cent.
Aberdeen’s stock price has held up well this year, helped by bumps from a rebrand from Abrdn and increasing inflows.
Other significant financial institutions set to report their quarterly results over the next week include St James’s Place and AJ Bell.