On Wednesday, RBC Capital Markets shifted its stance on Schroders Plc (LON:SDR:LN) (OTC: SHNWF), elevating the investment management firm’s stock rating from Sector Perform to Outperform. The firm also raised the price target to GBP3.95, up from the previous GBP3.30.
The upgrade comes with anticipation of a strategic growth update from Schroders’ new CEO, expected to be revealed with the full-year 2024 results on March 6. Analysts at RBC Capital believe that this announcement could serve as a catalyst for both consensus earnings upgrades and a price-to-earnings (P/E) multiple expansion.
Schroders’ shares are currently trading at what is perceived to be a low point, with a P/E multiple around 10.6 times, which is near the lowest in ten years. RBC Capital’s analysts see this as an opportunity, suggesting that the stock holds more potential for an upside than a downside as the company approaches the upcoming strategic update.
The firm’s analysts have expressed confidence in the potential for Schroders’ stock, stating, "An evolution of the growth strategy from the new CEO at FY24 results on 6 Mar is a potential catalyst for both consensus earnings upgrades, and a P/E multiple expansion."
RBC Capital has highlighted the current valuation of Schroders shares as an attractive entry point for investors, with the increased price target of 395p representing a notable rise from the previous target of 330p. This adjustment signals the firm’s belief in the investment manager’s prospects for growth and financial performance in the near future.
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