Berenberg raises target price on Quilter following FY results

Analysts at Berenberg raised their target price on wealth manager Quilter from 95.0p to 105.0p on Tuesday, stating that recent reductions in expenses ensured that it will deliver an earnings beat.

Berenberg noted that Quilter had reported its full-year results on 6 March, which brought about a roughly 2% share price jump on the day as its numbers came in ahead of consensus earnings expectations, primarily due to lower-than-expected operating expenses.

The German bank noted that although near-term client flows remained uncertain, given the elevated cost of living and the uncertain market environment, it said the long-term outlook for the UK wealth market was still "attractive", considering household wealth growth and the continuing improvements being made to address the suboptimal consumption of financial advice in the UK market over time.

Berenberg maintained its 'hold' rating on the stock but said its increased price target was driven by a jump in its earnings per share forecasts.

"We update our forecast to account for the latest set of results and outlook, driving EPS increases of 8-9% for FY24-25. This is primarily driven by a lowering of our operating cost assumptions and slightly increasing AuMA," said Berenberg, which added that Quilter currently trades on a roughly 11.0x forward earnings multiple.

Reporting by Iain Gilbert at Sharecast.com