Berenberg hikes target for "best-in-class" Schroders after strong results

Surging flows into funds at Schroders support the asset manager’s premium rating to the sector, according to Berenberg, which hiked its target price for the stock on Friday.

“Schroders is a best-in-class asset/wealth manager with strongly performing funds and global reach,” Berenberg said.

The broker raised its target from 2,900p to 3,340p and maintained a ‘buy’ recommendation for investors following “another excellent set of results”.

Schroders reported on Thursday that adjusted pre-tax profit was up 11% in 2014 at £565m, some 5% ahead of consensus expectations.

Berenberg said after a reasonably slow second and third quarter, flows picked up sharply towards the end of the year.

“Even aside from the £12bn Friends Life mandate which funded in Q4, net inflows of £5.8bn in the quarter were the highest level recorded since 2010 as the Institutional business saw momentum pick up sharply,” the broker said.

The stock was down 1.3% at 3,136p on Friday morning after making strong gains the previous session.