Berenberg lowers target price on Impax Asset Management

Analysts at Berenberg lowered their target price on Impax Asset Management from 620.0p to 560.0p on Tuesday but noted that outflows had started to slow.

Impax published its Q424 trading update on Tuesday, revealing that assets under management had increased 0.7% over the three months ended 30 September, primarily by market movements but partially offset by outflows, although these were slower compared to previous quarters.

Berenberg pointed out that Impax management believes the outlook to be positive for its investment approach and thinks that a decreasing base interest rate environment and a potential soft economic landing in the US should act as tailwinds for Impax.

"We have updated our forecasts, with our FY24 earnings per share estimate broadly unchanged, but a circa 6-12% EPS reduction in the outer years. This is primarily driven by a decrease in our net flow expectations for the start of FY25 (Q1 and Q2), partially offset by a reduction in our variable remuneration estimates given lower revenue forecasts," said the German bank, which reiterated its 'buy' rating on the group.

"We expect the company to continue to target a circa 30% adjusted profit before tax margin (although we forecast that it will drop slightly below this target in FY25 at circa 29%). We make no changes to our dividend per share forecasts."

Reporting by Iain Gilbert at Sharecast.com