Abrdn share price outlook as assets under management slips again

Written by

Written on Aug 8, 2023

Reading time 3 minutes

Abrdn stock price made a bearish breakout after the company’s weak earnings.
Its assets under management continued falling in the first half of the year.
It joins other companies like Schroders and St James Place in reporting weak results.

Abrdn (LON: ABDN) share price plunged hard on Tuesday after the asset manager published worrying financial results. The stock, which jumped to a multi-month high of 238p in July, it plunged to a low of 196.55p, the lowest level since May 25th. This means that it has dropped by ~17.45% from the year-to-date high.

Abrdn assets under management drops

Abrdn, like St James Palace, published relatively weak financial results on Tuesday. As I predicted here, the company’s assets under management (AUM) continued dropping in the first half of the year. Its AUM stands at over £496 billion, down by 1% on a year-on-year basis.

Abrdn’s net outflows stood at £4.4 billion while inflows rose to more than £1.9 billion. As a result, its net operating revenue jumped by 4% to £721 million while its adjusted profits rose by 4% to £721 million. The company blamed the poor performance to the overall market conditions.

These results show that the company’s turnaround strategy is not working as expected. Some of the top restructuring activities have included merging most of its funds, changing its name from Standard Life Aberdeen, job cuts, and acquiring Interactive Investors.

Interactive Investor’s revenue came in at £115 million in the first half of the year. Its adjusted operating profit was £67 million while the cost/income ratio was 42%.

The challenge for Abrdn is that its assets under management have been in a downward trend for years. As a result, this means that the company’s fees will continue easing for a while.

Abrdn is not the only languishing British asset manager. Schroder’s operating profit dropped by 14% as it cited a challenging market period for markets. St James Palace was forced to slash its fees to stem outflows.

The daily chart shows that the ABDN stock price made a bearish breakout after the company published weak results. As it dropped, it moved below the lower side of the ascending channel shown in black. The stock also fell below the 200-day exponential moving average.

It also retreated below the important support at 197.25p, the lowest level on May 30th. Therefore, the outlook of the shares is bearish, with the next level to watch being at 184.70p, the lowest point on March 17th. This is in line with my past ABDN share price outlook. The stop-loss of this outlook is at 210p.