Berenberg lowers target price on Liontrust Asset Management

(Sharecast News) - Analysts at Berenberg trimmed their target price on Liontrust Asset Management to 360p from 410p, citing tougher market conditions and fresh outflow risks that forced it to cut earnings forecasts for the next two years. Berenberg said equity‑market weakness, softer investor sentiment and the recent departure of two fund managers had created short‑term headwinds, prompting it to lower profit estimates by 9% for FY27 and 12% for FY28. It now expects higher redemptions, including around £200m at risk from strategies affected by the team exits, and weaker flows across the retail franchise.

The German bank forecasts net outflows of roughly £600m this quarter, with continued withdrawals from sustainable investment funds, moderating outflows from economic advantage and ongoing inflows into cashflow solution. It also reduced flow assumptions for the coming quarters, reflecting tentative demand for quality‑growth products.

Even so, Berenberg said it remained "cautiously optimistic", noting encouraging institutional engagement and the potential benefits of its recently completed River Global acquisition. Several River Global strategies, including global income and growth, were said to be performing well, and Berenberg believes Liontrust's distribution platform could help drive future inflows once integration has been completed.

Despite the earnings downgrade, Berenberg, which has a 'buy' rating on the stock, said Liontrust's valuation was already low, with the shares trading on a roughly 4x annualised enterprise value-to-underlying earnings ratio and offering a 7% yield based on an unchanged FY27 dividend. Berenberg added that while there was still material upside from the current share price, improved flows remained the key catalyst.





Reporting by Iain Gilbert at Sharecast.com