Morgan Stanley analyst Bruce Hamilton maintained a Hold rating on Schroders (SDR – Research Report) today and set a price target of p390.00.
Bruce Hamilton has given his Hold rating due to a combination of factors influencing Schroders’ financial outlook. The company has committed to significant cost-saving measures, aiming to save £150 million over three years, which is expected to improve its cost-to-income ratio to below 70% by 2027. This efficiency drive is anticipated to result in a modest upgrade in financial performance, with operating profit projected to be 2% better than consensus expectations.
Despite these positive cost-saving initiatives, there are concerns regarding the revenue growth in Schroders’ mutual fund and institutional business divisions, which face challenges from the shift from active to passive investments. Additionally, the company’s trading valuation is slightly above the sector average, trading at 11 times its 2025 earnings compared to the sector’s average of around 10 times. These mixed factors contribute to the Hold rating, as the potential for upside is balanced by the risks and challenges faced by the company.
According to TipRanks, Hamilton is ranked #881 out of 9384 analysts.
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