Schroders share price: Analysts see asset manager in stalemate

While Schroders (LON:SDR) has delivered in-line final results, analysts at Shore Capital argue that it is difficult to see the needle moving on the overall investment case for the group, Citywire reports. The comments came after the blue-chip asset manager updated investors on its full-year performance yesterday, posting a drop in profit, while unveiling higher net income.

Schroders’ share price, which came under pressure yesterday, have extended the previous session’s fall, having given up 2.54 percent to 2,529.00p as of 10:31 GMT. The shares are underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.88 percent lower at 7,094.51 points.

ShoreCap weighs in on Schroders

Citywire reported yesterday that Shore Capital analyst Paul McGinnis had retained his ‘hold’ recommendation on Schroders despite seeing “promising signs from a number of the initiatives established by chief executive Peter Harrison, such as the scale, diversity and capital strength” of the blue-chip asset manager.

The analyst explained that it was nevertheless “difficult to see these moving the needle on the overall investment case in the near term,” and the broker therefore remained “in somewhat of a stalemate in respect of how to consider the investment case”.

“Schroders is a high quality operator, able to withstand the volatility of investment markets better than most managers but to us, that’s part of the problem,” he pointed out, asking in what circumstances “would an investor want to own the most defensive asset manager”.

Other analysts on asset manager

Jefferies reaffirmed Schroders as a ‘buy’ yesterday, with a price target of 3,615p on the stock, while Canaccord Genuity continues to see the blue-chip asset manager as a ‘hold,’ valuing the shares at 2.637p. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 3,293p.

As of 10:45 GMT, Friday, 08 March, Schroders plc share price is 2,529.00p.