Jefferies upgrades Man Group, downgrades abrdn

Analysts at Jefferies upgraded investment manager Man Group from 'hold' to 'buy' on Monday but lowered abrdn from 'buy' to 'hold' as it took a fresh look at the UK sector.

Jefferies said Man Group's shares offered "cheap downside protection" should the current "more constructive market backdrop" start to unravel.

Whilst net flows will have deteriorated in the second half, due to LDI and rebalancing activity, Jefferies stated that gross inflows had "remained strong"

"Extraordinary capital returns should remain an attractive recurring feature of the equity story," said the analysts, who stood by their 285.0p target price on the stock.

As far as abrdn was concerned, Jefferies said its share price performance in the fourth quarter benefited from the execution of the second tranche of its buyback and a return to the FTSE 100.

"Whilst further capital returns seem likely as it looks to sell its ~10% stake in HDFC AMC (pending regulator approval), the ability to execute a sizeable buyback in the ST is limited ahead of the renewal of its AGM (10-May) authorisation," said Jefferies, which slightly raised its target price on the stock from 210.0p to 215.0p.

"Meanwhile, undertaking a turnaround of its core Investments unit in current market conditions will be challenging and recent commentary (press and company) re CFO succession planning adds uncertainty to the mix."

Reporting by Iain Gilbert at Sharecast.com