Standard Life Aberdeen PLC (LON:SLA) was weak on Thursday after Morgan Stanley downgraded its rating to 'equal-weight' from ‘overweight’, noting that recent efforts to unlock further shareholder value had failed to drive the stock.
The US investment bank also cut its target price for the FTSE 100-listed asset manager to 255p from 330p, with the shares currently changing hands at 252.60p, down 4.7% on Wednesday’s close.
In a note to clients, Morgan Stanley’s analysts said: “Our Overweight thesis was predicated on free optionality on flow turnaround and potential for management action to unlock value.”
However, they added: “Whilst we believe management has improved shareholder value/returns, e.g. buybacks and debt reduction, this has not driven share price outperformance, as outflows from the core ASI business accelerated through 2H18.
The analysts concluded: “With limited visibility on flow/performance turnaround and potential disposal of listed stakes, and our new FY19-20 forecasts ~20% below consensus (owing to our weaker top-line assumptions), the risk-reward no longer appears attractive.”