Berenberg restarts coverage on St James's Place at 'buy'

Analysts at Berenberg re-initiated coverage of wealth management firm St James's Place on Tuesday, hitting the group with a 'buy' rating and 1,194p target price.

With shares in SJP having fallen 9% over the last 12 months as investors fretted over a moderation in the group's sales growth, Berenberg said it viewed things "differently".

Berenberg said it found the resilience of SJP's sales "remarkable" given the industry-wide pause in demand.

The German broker also highlighted that with 85% of the group's management fee growth over the next three years expected to be driven simply by funds in gestation coming "online", there did not appear to be much doubt about the medium-term growth in St James's Place cash earnings.

Berenberg added that "chronic under penetration" of financial advice and expansion of SJP's advisor network also provided visibility on growth moving forwards.

"Given this outlook, we find the current valuation compelling," said Berenberg.

"We expect long-term growth to be driven by an ageing, affluent demographic in the UK and the increased complexity of investment and taxation arrangements, especially following recent pension reforms."