Man Group PLC (LSE:EMG) was given an upgrade to 'buy' and a target price hike by UBS ahead of its first-quarter update on Wednesday 26 April.
Performance fee expectations for the FTSE 250-listed hedge fund group have fallen sharply following a difficult March at its AHL strategies.
But the UBS analysts said they think the 30% share price decline "more than reflects this", with the shares now trading at "just" 13.5 times 2024 forecast management fee earnings.
This the analysts said "implies investors are buying the future performance fee potential at Man Group for free. We like that risk-reward."
On Man Group's core franchise, the analysts said they have a "very favourable view", with its technological leadership an "important (and unique, among the listed asset managers) competitive advantage".
With products that are increasingly in-demand, they predict Man Group will "continue to generate best-in-class client inflows in the coming years".
As for the quarterly results, the key thing to watch will be first fund flows, where UBS forecasts a US$0.3bn decline while the consensus estimate is for a positive US$1.0bn.
Despite strong equity and fixed income markets in the period, the Swiss bank expects Man's market performance to be "subdued" due to the declines in its absolute return products.
"Investors will also focus on any commentary on the Q1 NAV decline at Man Group's key AHL products."