Broker snap: Panmure upbeat about St James's Place after Lloyds sale

23rd May 2013 10:09

Shares in St James's Place (SJP) fell sharply on Thursday morning after Lloyds placed 77m shares in the wealth manager, but Panmure Gordon kept its 'buy' rating for the stock saying it still remains its top pick for 2013.Lloyds said the sale of a 15% stake follows the recent strong performance of SJP's share price and will improve SJP's liquidity by increasing its free float. Lloyds now owns just 21% of the company after cutting its stake in March.The placing was made at a price of 580p per share, some 9.3% lower than the closing price of 640p on Wednesday night."As with the previous placing in March we view the latest placing as positive as it indicates that Lloyds is willing to further reduce its stake in SJP thus removing what we believe is an overhang on the SJP share price together with increasing the free float," said analyst Barrie Cornes.He said that improving equity markets will continue to help SJP grow its top line by 15-20% whilst the net asset value will also benefit from better investment markets."We believe that the shares are likely to be under pressure in the very short term as a result of the placing, but believe that the anticipated weakness should be regarded as a buying opportunity."The target price for the shares has been lifted from 600p to 725p.The stock was down 9.63% at 578.38p by 10:31.BC