Berenberg cuts target price on AJ Bell

Analysts at Berenberg slashed their target price on online investment platform operator AJ Bell from 400.0p to 300.0p on Tuesday, citing a negative mark-to-market.

Berenberg said AJ Bell had posted "consistent" organic net inflows of £1.5bn in the three months ended 31 March, representing a roughly 7.9% annualised organic growth rate.

While the analysts also pointed out that total assets under administration fell by 2% to £74.1bn as a result of negative market movements driven by the invasion of Ukraine, they still saw the pickup in organic growth versus Q1, as being favourable, considering the "significantly higher levels" of uncertainty in the first quarter of the year.

The German bank also stated that AJ Bell had reported a negative investment performance of roughly £3.0bn over the period, representing a fall of 4.0%, worse than the MSCI PIMFA balanced index's roughly 3% fall over the same period. Markets have continued to slide and now down another 2% in April, meaning that further downgrades are ahead, added the analysts.

"While we think the organic growth numbers are supportive for the long-term investment case, we cut our estimates by 6-13% on the back of the lower market levels," said Berenberg, which reiterated its 'hold' rating on the stock.