Credit Suisse lifts Schroders target price, but stays 'neutral'

18th Mar 2014 09:17

Credit Suisse has lifted its target price for Schroders from 2,810p to 2,900p after the asset manager beat consensus forecasts with its 2013 results earlier this month.Schroders said on March 6th that pre-tax profits rose 24% to £447.5m in the 12 months to December 31st, earnings per share (EPS) were 25% higher at 130.6p, while assets under management (AuM) increased 24% to £263bn.Credit Suisse has made only "modest" changes to forecasts after the company's better-than-expected numbers were aided by strong performance fees "which are not necessarily expected to be repeated in 2014". Meanwhile, AuM were broadly in line with expectations.The bank has lifted its EPS forecast for 2014 by 1.6% to 157p and for 2015 by 1% to 174p.However, the bank maintained its 'neutral' recommendation on the shares, saying that while it sees improving flow momentum in 2014 it is already reflected in forecasts and the stock's valuation."We continue to view Schroders as a strong franchise and a well-diversified business but the stock is trading at a circa 15% premium to the sector on [a 2015 price-to-earnings ratio], and we see limited scope for earning upgrades."The stock was trading 0.5% higher at 2,612.62p by 09:49.BC