Deutsche Bank has kept St James's Place as its top pick among UK asset and wealth managers, despite trimming its price target to 2,000p from 2,050p.
Analyst David McCann retained his 'buy' rating on the wealth manager, arguing its valuation ignores a strong medium-term earnings growth story.
He expects earnings per share to grow by about 21% a year between 2026 and 2031, with the step-up coming from the 2027 financial year.
Yet the shares trade on a price-to-earnings (P/E) ratio of about 10 times forecast 2027 earnings, meaning investors pay roughly £10 for each £1 of expected profit.
McCann described St James's Place as a market leader in a structural growth industry.
Delivery of that earnings growth, particularly from 2027, is the key catalyst for the shares.
St James's Place is the only one of the five companies in the update to see its target cut.
Modest changes
Deutsche Bank's quarterly sector update found the third quarter of 2026 broadly neutral to slightly positive for asset class returns.
As a result, forecast changes were mostly modest, and no recommendations or investment cases changed materially.
The broker lifted its target for Polar Capital, the specialist fund manager it rates a 'buy', to 1,200p from 1,150p.
Man Group, the hedge fund firm, stays at 'hold' with a target raised to 360p from 345p.
Ashmore, the emerging markets specialist, remains a 'sell', though its target rises to 155p from 150p.
Liontrust, the UK fund manager, is also rated 'sell', with its target increased to 215p from 205p.
