On Monday, JPMorgan sustained its Underweight stance on Ashmore Group (ASHM:LN) (OTC: AJMPF), with a steady price target of GBP 1.84. The firm’s analyst pointed to Ashmore’s shares experiencing an approximate 8% rise over the past month, attributing the increase to improved market performance and a deceleration in net outflows during the fourth quarter of 2023. Despite the company’s first-half fiscal year 2024 results surpassing initial consensus expectations, the adjusted EBITDA fell short of JPMorgan’s forecast by 10%.
The analyst further noted the necessity to adjust earnings per share (EPS) predictions downward by around 9% on average for the fiscal years 2024 to 2027. This revision comes after considering Ashmore’s recent performance and future projections, which include a gradual recovery in net flows but no anticipation of a return to double-digit billion-dollar net inflows.
In the evaluation of Ashmore’s stock valuation, JPMorgan highlighted that at 18.9 times the estimated earnings for 2025, or 12.7 times when excluding excess capital, Ashmore stands as the most expensive among the traditional asset managers covered by the firm. The analyst expressed the view that the approximately 25% multiple re-rating of Ashmore’s stock since October 2023 is excessive.
The reiteration of the Underweight rating by JPMorgan reflects the firm’s perspective on Ashmore’s market position and future earnings potential. The current price target of GBP 1.84 remains unchanged, as the firm advises caution regarding Ashmore’s stock value relative to its earnings outlook and market performance.
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