Jefferies upgrades AJ Bell to ‘buy’, shares surge

"Having previously said much of the benefit of higher rates would go to customers, management's 15% revenue margin guidance uplift is material," it said.

"We were already confident in the business model and move to buy, having upgraded to hold two months ago, when the price-to-earnings multiple troughed at 21x."

Jefferies also noted that the company expects to achieve a pre-tax profit margin of around 37.5%, up 2 percentage points year-on-year.

"We take confidence from both platforms achieving positive net flows in a tough environment," the bank said.

"Although uncertainties remain, AJB has demonstrated the resilience of its business model and we think its strategy will succeed."

It also said that longer-term benefits should flow from higher brand awareness and a bigger market footprint.

At 1040 GMT, the shares were up 10.8% at 398.74p.