Broker snap: UBS cuts Man Group target, still top sector pick

4th Nov 2011 10:43

UBS has slashed its target price for hedge fund manager Man Group from 250p to 210p, after cutting its current-year estimates by 22%."Following the 5% negative performance of AHL in October, the $1.8bn degear of guaranteed products and the expectations of low performance fees in FY12E, we reduce our estimates by 22% in FY12E. We estimate c. 70-75% of earnings come from AHL," said analyst Arnaud Giblat.Nevertheless, the broker keeps its buy rating on the stock, saying that given challenging markets and low expectations, yesterday's interim results were reassuring on most key concerns.Giblat notes that flows were only slightly negative in October, management reassured on the dividend, and half of the cost base is flexible, "indicating downside protection should the market environment remain challenging."The company is UBS's top pick in the UK asset management sector.Shares in Man Group were down 0.69% at 143.70p by 10:32.BC