AJ Bell PLC (LSE:AJB) has had its price target lowered by Deutsche Bank following its full-year results, though the broker maintained its ‘Buy’ rating on the shares.
Deutsche Bank analyst David McCann said the negative share price reaction was due to new guidance on cost growth into FY26, which was higher than the market had expected. As a result, Deutsche Bank has cut its earnings per share forecasts for FY26 and FY27 by 10% and 11% respectively.
The price target was reduced from 625p to 570p (compared to 490p in the market on Friday).
Despite the lower target, McCann said the increase in costs is for the right reasons. He believes the business is investing to drive future growth and long-term profitability.
“We ultimately see it as a sign of good management that it is prepared to invest in the long-term success of the business, and not chase shorter-term profit,” he said.
In London, AJ Bell shares were up 1.5% changing hands at 491.8p.