Shares in Polar Capital Holdings PLC (AIM:POLR) were up 5% after Deutsche Bank upgraded its valuation of the stock.
It raised its price target from 1,050p to 1,250p and reiterated a 'buy' recommendation after assets under management at the specialist fund manager surged to more than £42 billion, with the bank's earnings forecasts now running well ahead of market consensus.
Analyst David McCann estimates assets under management rose a further 14% in May alone, extending a remarkable run that has seen the figure climb 38% since March and 48% since the start of 2026, driven primarily by strong performance and market returns from the firm's technology investment franchise.
The technology strategies now account for around 65% of group assets under management, a concentration that Deutsche Bank acknowledges raises questions about sustainability and portfolio risk, but which has been the dominant engine of recent growth alongside net inflows predominantly from the same franchise.
The scale of the asset growth, combined with operational gearing, meaning a business's tendency to convert incremental revenue into profit at an accelerating rate, has pushed Deutsche Bank's earnings estimates substantially above the broader analyst community. Its forecast for earnings per share in the financial year to March 2027 stands 73% above consensus.
Polar Capital's shares have already responded strongly, rising 23% in May, 38% since March, and 58% year to date, against a flat to marginal gain for the broader All-Share index over the same periods.
Despite those gains, Deutsche Bank argues the share price at 882p still does not fully reflect the step-change in the company's run-rate revenues and earnings, leaving meaningful upside to its new 1,250p target.