Berenberg hikes target price on AJ Bell following 'strong' Q3

(Sharecast News) - Analysts at Berenberg hiked their target price on online investment platform operator AJ Bell from 420.00p to 490.00p on Tuesday as it praised the group's "strong" Q3 performance.

Berenberg said net flows into AJ Bell continued to "remain strong" in Q325, coming in ahead of consensus expectations. Coupled with a strong period for markets, Berenberg noted that this meant AJ Bell's assets under administration had risen by 6% quarter-on-quarter and 15% year-on-year.

The German bank noted that AJ Bell's management highlighted that Q325 was a record quarter for net flows, with the business benefiting from investment in its brand and propositions.

"We increase our forecast EPS by c15% for FY25 and c11% for outer years. This is driven by the strong market performance in Q3, increases to our flow expectations in the D2C channel, and higher transactional-linked revenue given market volatility; partially offset by higher operational, technology and marketing costs," said Berenberg, which reiterated its 'hold' rating on the stock.

Berenberg added that AJ Bell currently trades on a roughly 22x forward price-to-earnings ratio.

Reporting by Iain Gilbert at Sharecast.com

AJ Bell