Source: Sharecast
"St James’s Place remains a top conviction within our coverage universe," it said.
The bank said it was updating its St James’s Place model, incorporating the reported Q1 assets under management, while also reflecting in its estimates the good market performance of recent weeks.
"As a result, we increase our 2025-27 underlying cash earnings per share estimates by 8-12%, primarily thanks to a circa 6% increase in our funds under management assumptions," it said.
"The higher FUM leads to a 4%-6% increase in net income, which is then amplified at the EPS level by operating margins as we make no changes to our cost estimates," said JPM, which lifted its price target accordingly.
It said that impressive strength in net flows over past 12 months demonstrate to the bank that St James’s Place is well on track to continue to grow and capture market share in the UK wealth management market.
"Whilst the repricing, which will kick in over the summer, will lead to a sequential decline in EPS in 2025 and 2026, this is already reflected in consensus, and we expect that attention will gradually shift to the appealing long-term growth trajectory for the business (JPMe 25% EPS compound annual growth rate over 2026-30), and drive a gradual re-rating in the stock," JPM said.
At 1110 BST, the shares were up 4.8% at 1,122p.