Man Group PLC (LSE:EMG) shares rose 5% after UBS upgraded the hedge fund manager to 'buy' from 'neutral', lifting its price target to 194p from 170p.
Analyst Michael Werner said Man’s systematic trading unit, AHL, has delivered striking returns over the past two months, setting the stage for upgrades to earnings forecasts.
UBS also brought forward assumptions for performance fees and share buybacks, reflecting greater confidence in the group’s ability to generate capital returns.
The London-listed firm has been actively repurchasing stock and offering one of the most attractive dividend yields in the sector, at around 7–8%.
Man’s assets under management hit a record $193.3 billion in the first half, though profit before tax fell 43% on weaker fee income.
Even so, investors appear encouraged by the rebound in performance and the prospect of fatter fees if trading gains continue.
On Friday, shares rose 8.9p to 175.5p, though year-to-date they are down 18%.