The sharp fall in St James's Place PLC (LSE:STJ) shares that first greeted the wealth manager's results drew a surprised reaction from analysts.
Jefferies analyst Julian Roberts said the market response appeared excessive, noting that net flows beat expectations and gross inflows reached a record for the group's first quarter.
A 7% drop in the shares "cannot be explained" by a 1% miss on funds under management, which Roberts said was largely driven by weaker market movements. "Are people misreading the evidence?"
Several factors seemed to contribute to the reaction, including softer pension inflows and shifts in business mix, but none appeared materially negative in isolation.
The analyst added that the stock may have been vulnerable given prior strong performance and broader concerns such as the FTSE 100 group's new pricing structure and market volatility.
Abid Hussain at Panmure Liberum said net flows were slightly better than consensus and that FUM retention remained "strong and no signs of outflow accelerations despite the fee structure change".
He added: "The business is simplifying its model and charging structure, with this the first wholly clean quarter under the new fee changes, so it is encouraging to see retention levels holding up well and we continue to believe that the advice led business should create stickier flows."
UBS took a simple view that the FUM miss was the key driver of sentiment, and only warranted a "small negative reaction".
While net inflows slightly beat forecasts, UBS analyst Nasib Ahmed said this was partly driven by lower-margin business lines, and reiterated that it expected a small negative reaction from investors.
All analysts reiterated their existing 'buy' recommendations. UBS has a 12-month price target of 1,520p, Jefferies' target is 1,700p and Panmure's 2,050p, implying respective upside of 21%, 36% and 63% from the last close at 1,252p.