Broker snap: Schroders upgraded on earnings momentum

12th Apr 2011 13:04

Credit Suisse upgrades fund manager Schroders from 'underperform' to 'neutral', saying that its valuation is increasingly attractive relative to the peer group given the strong earnings momentum.The broker has raised its revenue forecasts for 2011 and 2012 by 3-4% to reflect slightly higher assets under management forecasts and revenues from surplus capital. Pre-tax profit estimates for 2011 and 2012 are upped by 5% and 3%, respectively.However, "the company had highlighted that retail flows would slow this quarter at its results in mid-February but given the deteriorating industry trends through March we estimate zero net inflows from retail clients this quarter," said analyst Rupak Ghose.The target price is increased to 1,850p, from 1,650p previously.---bc