AJ Bell PLC (LSE:AJB), has received a double upgrade from UBS, which sees the wealth platform as well-positioned to convert its strong performance into share price gains once the market and investor sentiment improves.
UBS said the investment group’s ability to win market share despite being in a cyclically challenged environment puts it in good stead.
Analysts believe the group’s competitive pricing and services give it an advantage over rivals such as Hargreaves Lansdown.
AJ Bell has consistently generated more new business in its direct-to-consumer division compared to its larger Bristol-based competitor and numerous quarters have brought in more cash than Hargreaves Lansdown.
“We see AJB's strong competitive positioning and proven ability to win market share in the difficult environment of the last few years likely to drive even greater gains in a rising market,” the Swiss bank said.
UBS also noted the concerns surrounding the FCA’s intervention in the industry to ensure companies comply with consumer duty of care rules.
Analysts believe that while the regulator’s intervention will result in higher paid interest and the end of double dipping for customers, AJ Bell only faces limited risk should the FCA further intervene.
Based on the developments, UBS has upgraded the group from a “sell” to a “buy” and has lifted its share price target to 375p, nearly a 13% premium to its current value.