Bank of America starts coverage of Rathbones at 'buy'.
Bank of America initiated coverage of wealth manager Rathbones on Wednesday with a ‘buy’ rating and 2,250p price target, as it said the stock remains highly undervalued on around 10x 2026 estimated price-to-earnings.
Rathbones Group
18 June 2025 11:24:47
Source: Sharecast
It noted that this is a 19% discount to the five-year average.
"We think the current valuation does not price in the transformational acquisition of IW&I, which has driven FUMA +67% and formed one of the largest UK wealth managers," the bank said.
"The migration of IW&I is due to complete in H125, followed by a net flow recovery and realisation of most synergies in H225E."
Bank of America said this should drive operating margin expansion to 28.4% in 2026E, versus consensus of 27.7%.
"We further expect wealth and asset management net flows to be supported by equity market momentum, softening interest rates and reallocation from US to EU equities," it added.
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