Cautious Outlook on Schroders: Sell Rating Amid Valuation Concerns and Mixed AUM Performance

Analyst Marina Massuti of Morgan Stanley maintained a Sell rating on Schroders, with a price target of p340.00.

Marina Massuti has given her Sell rating due to a combination of factors that suggest caution for investors. Despite Schroders reporting assets under management (AUM) figures that are 2% above consensus expectations, the stock is trading at a price-to-earnings ratio of 10.5x for 2026, which is below the sector average of 12x. This lower valuation indicates potential concerns about the company’s growth prospects or profitability.
Moreover, while net new money inflows exceeded expectations, the wealth management segment’s net new money rate of 1.6% falls short of the company’s target range of 5-7%. Additionally, the outflows in equities and multi-asset classes, along with redemptions in fixed income strategies in the APAC and UK regions, raise concerns about the sustainability of positive flows. The market’s focus on fee margins linked to the AUM mix and weaker performance in certain areas further supports the cautious outlook, leading to the Sell recommendation.