Shares in Standard Life Aberdeen (LON:SLA) have been steady in today’s session even as RBC Capital trimmed its rating on the blue-chip group, pointing to dividend concerns. The move comes as the FTSE 100 company prepares to update investors on its full-year performance tomorrow.
As of 12:42 GMT, Standard Life Aberdeen’s share price had climbed 0.37 percent to 245.50p. The stock is marginally outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.25 percent higher at 7,148.71 points.
RBC trims stance on SLA
RBC trimmed its rating on Standard Life Aberdeen to ‘underperform’ today, lowering its price target on the shares from 260p to 215p. Proactive Investors quoted the analysts as commenting that because the FTSE 100 group has sold off its ‘highly cash generative’ life insurance books, it is now relying on cash generated from its asset management activities, “whose revenues rise and fall in line with prevailing market conditions”.
The broker estimates that the outflows from SLA’s flagship GARS fund totalled £15 billion over 2018, and that £2.2 billion “has left the strategy in 2019 [so far]”.
“We maintain our net outflow forecasts of £7 billion for 2019 and £5 billion for 2020,” RBC pointed out, adding that in its view, “given the persistent net outflows, which we do not expect to reverse until at least 2021, the dividend is not as secure as it was prior to the sale of SLA Life”.
Other analysts on group
Citigroup reaffirmed its ‘buy’ rating on Standard Life Aberdeen today, while Barclays reiterated its ‘overweight’ stance on the shares yesterday. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 341.67p.