Source: Sharecast
"With a recovering LFL exit rate in September and the group's ability to mitigate labour costs increases, we believe the shares have been oversold," it said. "Cost pressures will grow, but we expect core customer wage increases and improving household finances to offset the vast majority."
RBC forecasts FY23-26 organic growth compound annual growth rate of around 11%, with a roughly sever-year rollout, keeping this "high-quality compounder" firmly in growth territory, supporting a return to its historic multiple.
The Canadian bank added that its price target justified an 'outperform' rating and also stated there was potential for further cash returns as capex eases.
Analysts at Berenberg lowered their target price on Impax Asset Management from 560.0p to 510.0p on Friday after news broke that the group's mandate to manage St James's Place's sustainable and responsible equity fund was expected to end in February 2025.
Berenberg said the SRE fund accounted for roughly £5.2bn of Impax's assets under management, or approximately 14% of total AuM.
The German bank also noted that it understands that the mandate termination was primarily driven by St James's Place's desire to diversify SRE using an alternative investment strategy.
"We have updated our forecasts for Impax, with a circa 7% reduction in our FY25 EPS estimate and a circa 6-7% EPS reduction in the outer years. This assumes that the SJP mandate ends in Q225. We reduce our FY25 revenue forecast by circa 5% partially offset by a circa 4% reduction in operating costs," said Berenberg.
"Operating costs are lowered in our forecasts as Impax typically pays out circa 40-45% of pre-bonus profit as remuneration (our forecasts assume circa 43% is paid out in FY25)."