Jupiter Fund boosted by Barclays upgrade

Jupiter Fund Management got a boost on Tuesday as Barclays upgraded the stock to ‘overweight’ from ‘equalweight’ and lifted the price target to 525p from 420p to reflect a sector re-rating and earnings per share upgrades.

The bank said Jupiter had “remarkably resilient” net inflows in the first half of 2016. It said that despite having the strongest weighting to equities within its assets under management mix at 80% – and around 25% AUM invested in European equities – most of its net inflows have been from the Dynamic/Strategic Bond range.

“These are benefitting from trends of UK investors’ preference for bonds and hunt for yield,” Barclays said.

“Overall, Jupiter’s high-quality fund range and dividend income appeal (around 6% yield) stands out amongst peers in our opinion, but valuation at about 15x 2017 PE is at a discount to sector average of around 16x, which seems unjustified given superior flow momentum.”

The upgrade came as Barclays took a look at the broader European asset managers, reiterating its ‘underweight’ rating on both Aberdeen Asset Management and Ashmore, with new price targets of 300p from 270p and 325p from 270p, respectively.

The bank kept Schroders at ‘equalweight’ and lifted the price target to 3,030p from 2,850p.

At 1045 BST, Jupiter shares were up 2.7% to 450.30p.