RBC has adjusted its target stock prices for wealth management firms, downgrading St James's Place while upgrading Quilter and Rathbones.
RBC analyst Ben Bathurst revised his price target on the º£½ÇÊÓƵ's largest wealth manager from 1,100p to 1,050p today, as reported by .
Shares of St James's Place dipped over two per cent following the announcement, underperforming against a less than one per cent drop in the broader market.
Bathurst attributed the downgrade to recent softer global markets, which could affect St James's Place's fund performance and new capital inflows.
He reduced his net flow projections for the current year by five per cent, anticipating weaker retail sentiment and a fall in pension sales in the latter half of the year.
Consequently, Bathurst lowered earnings forecasts for St James's Place by two per cent for 2026 and six per cent for 2027, also predicting that net cash would fall short of the target by six per cent by 2030.
"Despite this headwind we still expect clear positive net flows each quarter – which we see as important for sentiment towards St James's Place shares," he noted.
After a remarkable recovery, St James's Place's share price has doubled over the past year but has faced challenges since mid-February, declining by 17.5 per cent.
In contrast, RBC has raised the target prices for Quilter and Rathbones, with Rathbones receiving an 'outperform' rating.
Following the recent announcement of Rathbones CEO Paul Stockton's upcoming retirement, Bathurst commented: "Timely arrival of new management offers an opportunity for further strategic progression". Rathbones is currently undervalued compared to its peers, trading at 9.6 times expected earnings, below the sector average of 12.9 times.
The integration of Rathbones and Investec Wealth and Investment is nearing completion, which should enhance efficiency. Bathurst expects the company to return to positive net flows from the second half of 2025, boosting sentiment and market rating.
"Asset gathering has been depressed through the integration process but we expect a return to positive net flows from the second half of 2025 onwards, which we would expect to be supportive to sentiment, and by extension market rating," said Bathurst.
Additionally, Quilter's stock price target was revised upwards from 160p to 180p, driven by the wealth manager's positive full-year results and increasing dividend, according to the analyst.
