AJ Bell PLC (LSE:AJB), the investment platform, received an upgrade to buy from UBS on Tuesday as the Swiss bank argued that a recent share price fall driven by concerns over rising costs had created an attractive entry point, with earnings growth expected to recover sharply from 2027.
UBS raised its rating from neutral while retaining its 520p price target, implying upside of around 20% from the 430p price at which the stock was trading when the note was published.
The analysts acknowledged that earnings per share growth would slow sharply to around 6% in the financial year to September 2026, down from 26% in 2025, as AJ Bell absorbs a 17% rise in business-as-usual costs, including technology and artificial intelligence investment.
However, they argued this slowdown was more than reflected in the share price and forecast a recovery to around 15% earnings per share growth in 2027 as cost growth normalises and net flows improve on both its advised and direct-to-consumer platforms.
AJ Bell operates two distinct channels: an advised platform serving independent financial advisers, and a direct-to-consumer platform aimed at retail investors managing their own money.
UBS said direct-to-consumer net flows remained strong, and that the advised business was showing early signs of recovery in gross inflows following new pricing initiatives, with headwinds from adviser consolidation and pension reform uncertainty expected to ease by the end of 2026.
The bank also raised its earnings forecasts by 6% to 10% for the period to 2029, reflecting more positive assumptions on market returns following strong index performance in early 2026.
UBS said AJ Bell's track record of competitive pricing and investment in customer experience actually positioned it well against the risk of artificial intelligence, making it easier for retail investors to compare platform costs, as the company had historically been willing to reinvest in lower fees to win market share.
The bank also highlighted AJ Bell's strong cash generation and said it expected around £50 million per year in share buybacks to continue into the medium term.
In early afternoon trading, the shares were up 2% at 438.4p.