Berenberg sounds exceedingly 'bullish' note on St.James's Place's fundamentals

27th Sep 2018 12:53

(Sharecast News) - Analysts at Berenberg sounded an exceedingly 'bullish' note on shares of St.James's Place, highlighting what they believed were the significant valuation gaps which concerns around Brexit and market levels had opened up vis-a-vis logic or the company's 'fundamentals'.Even after taking account recent listings in its sector, the German broker deemed the stock one of the cheapest in its coverage, telling clients that the asset and wealth manager had a "superior" model and sustainable advantage."The shares seem to be discounting macro concerns such as Brexit and market levels, which may or may not be valid but which have opened up an enormous gap with any logical or fundamental valuation of this company," analysts Trevor Moss and Charles Bendit said.Berenberg also noted how the shares were then currently trading without assigning attributed franchise value.As well, under a discounted-cash-flow method, approximately 40% of the shares's market value was attributable to "pensions in gestation", but that aspect of the company's 'equity story' was completely ignored under all the multiple-based valuation methods.Moss and Bendit also highlighted the very supportive market backdrop, given the ageing population, which was generally undersaved for retirement, and the ever-increasing complexity of financial planning.In a nutshell, "the need for advice has rarely been greater," they said.They also highlighted St.James's Place market-leading retention rate for client funds.Berenberg raised its target price for the shares from 1,610p to 1,580p, while reiterating its 'buy' recommendation.