Berenberg cuts St James's Place to 'hold', says it's up with events

30th Jul 2015 15:09

(ShareCast News) - Berenberg downgraded St James's Place to 'hold' from 'buy' with an unchanged price target of 950p, saying that following a strong rally year-to-date the share price is now largely up with events."With the FTSE 100 and FTSE All Share struggling to stay in the green so far this year, the performance of St James's Place at +16% seems somewhat difficult to justify."Despite reporting a strong set of first-half results in terms of net flows and funds under management, the negative impact of the significant increase in the Financial Services Compensation Scheme levy has created a drag on earnings, the bank said."Furthermore, as management continues to look to invest (both organically and inorganically) to drive the next leg of growth, the short-term impact on costs looks set to prove more negative to earnings progression than we had previously forecast."Berenberg said that while it's well-positioned for longer-term growth, it sees better opportunities elsewhere at the present time.It said earnings and cash generation have been affected by regulator and investment spend, tempering its enthusiasm for the business model.At 14:19, shares were flat at 973p.