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UBS downgrades Jupiter Fund Management to ‘sell’ as it expects shares to suffer a de-rating

Last updated: 14:20 26 Feb 2018 GMT, First published: 12:56 26 Feb 2018 GMT

Downgrading
UBS also lowered earnings per share estimates for Jupiter by 2% for 2018 and by 6%-9% for 2019 and 2020

UBS has downgraded its rating for Jupiter Fund Management PLC (LON:JUP) to ‘sell’ from ‘neutral’ and cut its target price to 460p from 531p a day ahead of the FTSE 250-listed asset manager's full-year results. 

In a note to clients, analysts at the Swiss bank said they downgraded Jupiter’s rating because they expect lower inflows as a result of the recent outflows from the company’s Dynamic Bond fund.

READ: Jupiter Fund Management sees strong inflow of funds in the third quarter

They noted that Jupiter has been one of the fastest-growing asset managers in the UK in recent years, however, more than 100% of its retail fund inflows over the past five years have been concentrated in just two of its funds and these funds have seen a sharp reversal of fortune in recent months, moving from strong inflows in 2017 to strong outflows in 2018.

The analysts said they have lowered their earnings per share estimates for Jupiter by 2% for 2018 and by 6%-9% for 2019 and 2020 after cutting their net inflow and market performance expectations for the company.

They concluded: “We expect the sharp reduction of flows from the Dynamic Bond Fund will cause a de-rating of Jupiter.”

In afternoon trading, Jupiter shares were down 1.4% to 523.6p.

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