UBS is expecting M&G PLC (LSE:MNG) to deliver a strong first-half performance, thanks largely to robust net inflows into its Wholesale asset management business.
In a preview note ahead of the event (still almost a month away), UBS points out that M&G may have secured £2.2bn of net flows within this high-margin segment over the period, based on recent fund flow tracker data.
This is well ahead of the £500 million consensus forecast, and UBS’s projection of £1.2bn.
“A net flow beat within asset management can support a further re-rating,” UBS writes, suggesting that every £1.5bn above consensus could add roughly 1% to earnings estimates.
The note highlights that M&G’s wholesale funds have consistently held top performance scores across the sector since mid-2022, with active European fixed income funds, now over 40% of M&G’s wholesale book, proving especially popular.
UBS maintains its ‘buy’ rating on the shares, with a 12-month price target of 275p, citing both the prospect of near-term earnings upgrades and the potential for a longer-term re-rating.
On the insurance side, it is relaxed about remittance trends, noting that distributable reserves remain sufficient to cover more than two years’ worth of payments, even after recent declines.
Overall, the Swiss bank continues to view M&G as one of the best capitalised companies in the sector, with solid room for upside as flows and earnings momentum build.
In afternoon trading, the shares were up 0.6% at 262.6p.