Citigroup bumps Ashmore up to 'buy', notes good medium-term entry point

13th Aug 2015 10:44

(ShareCast News) - Ashmore got a boost after Citigroup upgraded the stock to 'buy' from 'neutral' as it took a look at UK asset managers.The bank said Ashmore was a "brave buying opportunity for the medium term" as it raised its price target on the stock to 290p from 270p.It said that if investors are willing to look through likely near-term volatility in emerging markets debt returns, the current share price levels offer a good entry point for the medium term and anticipated recovery in flows and returns."The 7% yield is a key component of our 'buy' case, smoothing the path for investors whilst we wait for fundamental recovery during what is likely to be a near-term period of EM debt market volatility," said Citi, adding that Ashmore has one of the best EBITDA margins in the sector.Citi downgraded Jupiter Fund Management and St James's Place to 'neutral' from 'buy'. It raised Jupiter's price target to 490p from 480p and St James's to 1,020p from 1,000p.As far as Jupiter is concerned, Citi said it sees slow fund inflows, falling fee margins and higher regulatory costs adding up to a valuation headwind that outweighs the capital return story.In the longer term, it sees Jupiter as well-positioned to capture growth in the savings market, helped by growing international distribution.The bank said it continues to see St James as a quality name, but the valuation now looks fair given higher investment costs and UK pensions reform uncertainty.At 1214 BST, Ashmore shares were up 4.4% at 264.30p, Jupiter was up 1.1% at 450.70p and St James's Place was 0.5% higher at 963p.