Broker snap: Schroders fully valued after Q3 results

7th Nov 2013 10:08

Panmure Gordon has maintained its 'hold' recommendation for fund manager Schroders, saying that the stock's valuation is full after its third-quarter results.Bottom-line figures were broadly in line with estimates, according to analyst Keith Baird, with profit before tax up 37% at £121.6m, compared with consensus forecasts of £120m.He highlighted that the results showed a positive net inflow of £1bn, compared with the £0.3bn forecast, which represents a turnaround from net outflows in the second quarter."The outlook for Schroders and markets remains positive but we leave forecasts unchanged."Baird said that the shares have flat-lined on a relative basis and look "fully valued" against his 2014 price target of 2,740p."The shares have been flat against the market over three months but are up 40% relative over one year in line with other asset managers, of which one third has come from multiple expansion (which looks to have hit the limit) and two thirds from higher earnings."He said he prefers small asset managers for their gearing to growth.The stock was down 3.8% at 2,506p by 10:12 on Thursday.BC