RBC analysts have raised their target price for Schroders' stock, taking into account the group's recently announced cost-cutting initiative.
The bank has increased Schroders' target price from 395p to 475p. The stock is currently trading at 379p, having risen 17 per cent since the beginning of 2025, as reported by .
The cost-cutting strategy was unveiled when Schroders released its annual results earlier this month, which also showed a 14 per cent increase in pre-tax profit over the year.
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Schroders aims to achieve £150m in cost savings by 2027, with £20m already cut in the first quarter of this year and an additional £40m expected to be saved throughout 2025.
Following the announcement of the plan, RBC revised its estimates for the group's adjusted operating earnings, raising them by up to nine per cent by 2027.
RBC analyst Mandeep Jagpal anticipates Schroders' £603m adjusted operating profit from 2024 to continue growing, potentially reaching as high as £811m by 2027.
However, RBC's expectations exceed the consensus among other analysts, who predict a more conservative £737m in adjusted operating profit by 2027.
The bank also forecasts a recovery in inflows for Schroders this year, after investors withdrew £10.8bn from the company in 2024.
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Schroders' shares are currently trading at just 11 times its projected earnings, a 20 per cent discount to its historical average, as well as a discount to its sum-of-the-parts valuation used listed peer multiples.
For instance, rival firm St James's Place is trading at a 13.8 times multiple, while Quilter is trading at a 12.8 times multiple.
"These discounts underscore the persistently low market expectations for Schroders, and reinforce our view of more upside risk than downside from here," Jagpal stated.
The analyst pointed out that the 海角视频 asset managers covered by RBC have seen their share prices decline by six per cent since the beginning of 2024, in contrast to a 50 per cent increase in the European asset managers they cover.