UBS has downgraded St James's Place PLC (LSE:STJ) to a 'neutral' rating from 'buy', stating that the wealth manager’s recovery is now largely reflected in its share price.
The investment bank set a price target of 1,180p, only slightly above the current level, implying limited further upside for investors.
The downgrade comes despite UBS recognising medium-term earnings growth potential from 2027 onwards.
Its analysts noted that SJP’s revised charging structure, due to take effect in the second half of 2025, could weigh on earnings in the near term. There are also concerns about industry-wide margin pressure and potential regulatory changes.
UBS pointed to risks such as possible client outflows and higher-than-expected costs linked to SJP’s overhaul of its fee model.
The wealth manager has already indicated that implementing the new structure will cost towards the upper end of its £140m-£160m guidance. Any further expense overruns could pressure margins.
On the upside, UBS acknowledged that a release of client redress provisions or better macroeconomic conditions could provide a boost. The firm expects SJP’s payout ratio to rise again from 2027 as earnings recover, though it does not anticipate an earlier increase.
In afternoon trading, the stock was flat at 1,046p.