St James’s Place investors brace for results as Citi upgrades stock
St James’s Place investors are gearing up for the release of the wealth manager’s full-year results next week as Citi analysts have upgraded their price target for the stock.
In a note yesterday, Citi analysts upgraded the stock’s price target from 1,080p to 1,280p compared to the current share price of 1,130p.
“Our funds under management estimates increase by five per cent, driven by market appreciation and stronger-than-expected fourth quarter flows,” said Citi analysts, adding that this is expected to boost outer-year cash earnings per share by 10 per cent.
The firm is expected to have generated £1.1bn in management fees last year.
In a trading update last month, St James’s Place exceeded inflow expectations by 70 per cent. It recorded £1.5bn of inflows in the last quarter of the year.
While the firm’s pension arm brought in the vast majority of new business, every arm of the wealth manager saw inflows, and investors celebrated the good news, sending the stock up by 10 per cent in a single day.
Since the beginning of the year, shares in the wealth manager have jumped 32 per cent.
Results in view
Analysts at UBS have noted that the group’s underlying cash results will be an important metric to watch when the company reports results next week. On a consensus basis, analysts are projecting £427m.
Meanwhile, after the wealth manager pledged to overhaul its opaque fee structure and scrap its exit charge, investors have been waiting for any details on the new charge structure coming in the second half of this year.
The market will also be watching for further details of the wealth manager’s plans to overhaul its fee structure. It pledged to overhaul its opaque fee structure and scrap its exit charge last year, and the market has been waiting for additional details on the plan.
St James’s Place also revealed last summer it would embark on a plan to slash £100m from its cost base over the next two years, with cumulative cuts of around £500m expected by 2030.
In December, it was reported that the wealth manager would be cutting around a sixth of its non-financial adviser workforce as part of the programme, making about 500 redundancies.