RBC Capital Markets has raised its share price target for Polar Capital Holdings PLC (AIM:POLR) to 560p, up from 410p, citing a stronger outlook for profits and assets under management.
The upgrade comes ahead of Polar’s first-quarter trading statement, due on Thursday (July 10), and reflects both the recent bounce in global stock markets and better-than-expected results for the year to March.
The key driver behind the more optimistic stance is the expectation that Polar’s assets under management will rise to £23.3 billion by the end of June, roughly 9% higher than three months earlier and 3% ahead of market consensus.
This increase is mainly due to a recovery in equity markets, which more than offsets modest outflows from client funds.
RBC now expects core operating profits for the financial year ending March 2026 to climb by 18%, with earnings for the following year also upgraded.
Polar is forecast to maintain its generous dividend, yielding 9.4% at the current share price.
The firm’s reputation for specialist equity funds, strong brand, and expanding presence in Europe, Asia, and the US underpin its growth prospects.
The report highlights rising demand for Polar’s emerging markets and artificial intelligence strategies and notes that interest from US investors in European and UK assets is picking up.
RBC points out that Polar trades at a discount to its longer-term average valuation, suggesting further share price gains are possible if fund inflows continue to recover.
However, the note also cautions that heavy exposure to technology stocks and a shift in market sentiment could weigh on performance. Even so, the overall outlook is upbeat, with RBC retaining its ‘outperform’ rating on the shares.
The stock was up 1% to 492.61p.