After a tough year of scrutiny and structural change, St James's Place PLC (LSE:STJ) looks to be regaining its stride.
Panmure Liberum has lifted its target price to 1,600p from 1,500p and kept its 'buy' rating, arguing that the wealth manager’s third-quarter update showed resilience where it matters most: net flows and client confidence.
Funds under management rose 7% to £212.4 billion, broadly in line with expectations, helped by £1.8 billion of net new business and a £12 billion market tailwind.
Those numbers were stronger than consensus, suggesting that the group’s new, simplified charging model has bedded in smoothly despite initial fears of disruption.
Panmure notes that client engagement was “unseasonally high” in the quarter as investors reacted to both the new fee structure and speculation ahead of the Autumn Budget.
The firm expects a slightly quieter fourth quarter as some business was brought forward, but stresses that the medium-term picture remains intact.
Consensus forecasts imply £7.1 billion of net inflows for 2025, with modest growth thereafter.
More importantly, Panmure argues that future profit growth is largely locked in: roughly £300 million of cash profit sits within “funds in gestation”, investments already made but not yet contributing to earnings.
That embedded value gives unusually high visibility over the path to doubling profits by 2030.
On Panmure’s estimates, earnings should rise at a compound rate of around 15% over the next five years, helped by cost savings and maturing funds.
The shares trade on 17 times 2025 earnings, falling to 13 times by 2027, which looks cheap for a business with this kind of predictability.
The broker thinks the market still undervalues the quality of St James’s Place’s client base and the clarity that now surrounds its fees.
In an era of complex personal finance, advice remains a growth business, and Britain’s biggest wealth manager looks well placed to cash in.