Man Group's Q1 miss was temporary "roadbump", says Jefferies

Shares in Man Group dropped on Friday after the investment management firm reported unexpected net outflows in the first quarter, but that didn't deter Jefferies from reiterating its 'buy' rating for the stock.

The company said AUM totalled $175.7bn by 31 March, up from the $167.5bn reported at the end of the 2023 financial year.

However, while headline AUM were broadly in line with estimates, with consensus being $177bn, as a strong investment performance of +$9.8bn helped outweigh a surprise $1.6bn in net outflows. Jefferies pointed out that consensus forecasts were for positive net flows of $1.3bn.

Nevertheless, the broker stuck with its positive rating on the stock and its 300p target price, which suggests 12% upside from Thursday's closing price.

"Occasional roadbumps are not unexpected at Man, but the fact that AUM — incl. Absolute Return, driven by strong performance and despite the outflows — is at record highs demonstrates the enduring and more consistent growth in mgmt. fee profitability," Jefferies said.

The stock was down nearly 5% at 255.2p by 1028 BST.