RBC Capital reiterates 'outperform' on Schroders, hikes price target

(Sharecast News) - RBC Capital Markets reiterated its 'outperform' rating on Schroders on Thursday and hiked its price target to 475p from 395p as it lifted its adjusted operating earnings estimates by 1%/6%/9% over FY25/26/27, updating the FY24 results and strategy evolution. "Upgrades are driven by the delivery of efficiencies, which offsets Public Market revenue cuts, where SDR's guidance for only 'stable' Public Markets revenue to FY27 should reset market expectations," the bank said.

"We consider this guidance conservative, and see risk skewed to the upside from the fee margin or net flow environments being more supportive than prudently assumed."

RBC said Schroders trades on an undemanding 12-month forward price-to-earnings of 11x, which is a circa 20% discount to its historic average and sum of the parts.