Rathbones is undoubtedly one of the strongest listed wealth managers with an impressive track record and sustained best-in-sector margins. But having doubled FuM in the last 5 years, we believe that the aspirational 5% organic flow target will not be achieved from here, with 3% more likely. We also forecast margin erosion from cost investment to deliver growth initiatives. With no material earnings growth and margin erosion the premium rating looks vulnerable going forward, SELL.
25 Apr 2017
N+1 Singer - Rathbone Brothers - Facing the challenge to deliver growth
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N+1 Singer - Rathbone Brothers - Facing the challenge to deliver growth
Rathbones Group PLC (RAT:LON) | 1,547 371.3 1.6% | Mkt Cap: 1,402m
- Published:
25 Apr 2017 -
Author:
Andrew Watson -
Pages:
20
Rathbones is undoubtedly one of the strongest listed wealth managers with an impressive track record and sustained best-in-sector margins. But having doubled FuM in the last 5 years, we believe that the aspirational 5% organic flow target will not be achieved from here, with 3% more likely. We also forecast margin erosion from cost investment to deliver growth initiatives. With no material earnings growth and margin erosion the premium rating looks vulnerable going forward, SELL.