Berenberg slashes target price on Liontrust

Analysts at Berenberg slashed their target price on asset manager Liontrust from 1,850.0p to 1,100.0p despite the group's full-year results beating expectations, stating falling markets looked set to weigh on the stock.

Berenberg said Liontrust's recently wrapped up trading year was characterised by a "strong" level of earnings growth but noted that this had been offset by falling markets since the start of the calendar year.

"The company reported strong FY22 results with EPS of 127.6p (up by 59% yoy), c13% ahead of consensus expectations. Liontrust demonstrated strong organic assets under management and administration (AUMA) growth of £2.5bn in FY22, representing a c8% annualised organic growth rate," said Berenberg.

"That said, total AUMA fell by c12% to £34.2bn between 1 April and 17 June as a result of negative market movements driven by the conflict in Ukraine. Organic growth has actually gone into reverse since the beginning of FY23; this is understandable in light of the higher levels of uncertainty in the first part of the year and Liontrust’s predominantly UK retail footprint."

Taking this into account, the German bank cut its full-year 2023-24 estimates by roughly 8-17% to reflect the current market levels but opted to reiterate its 'hold' rating on the stock.

Reporting by Iain Gilbert at Sharecast.com