Broker re-rates Aberdeen to ‘Outperform’

Aberdeen Asset Management’s shares have been rerated to ‘Outperform’ by brokerage RBC Capital Markets, which anticipates an 11% increase in net revenues for the firm.

The RBC analysts also forecasted lower outflows for the asset manager, expecting £8.5 billion (€9.9 billion) of outflows at the end of the first quarter 2017, compared to £10.5 billion in the previous quarter.

The price target is held at 300 pence, but the analysts changed their valuation approach to take account of Aberdeen’s merger with Standard Life, which rerated Aberdeen to ‘Outperform’.

They expect assets under management to have increased by 1% to £305.8 billion over the first quarter of this year.

“Despite ongoing net outflows, we anticipate these were more than offset by strong investment performance…” said Peter K Lenardos and Elliot Broadbent in a report.

The costs savings they predict from the Aberdeen merger with Standard Life could be as much as 50%, more than the stated figure of £200 million.

“Aberdeen offers ongoing cost control, inflecting net flows, a stable revenue margin, and decent underlying investment performance. At the current level, we believe Aberdeen is attractive to both value and income-orientated investors,” the analysts say.

Aberdeen reports its interim results on May 2.

©2017 funds europe

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