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Standard Life Aberdeen weak as Morgan Stanley downgrades to 'equal-weight' from ‘overweight’

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

Aberdeen office
The Morgan Stanley analysts concluded that the stock's risk-reward no longer appears attractive

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.

READ: Standard Life Aberdeen slides as RBC downgrades to ‘Sector Perform’

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.”

Quick facts: Standard Life Aberdeen PLC

Price: 313.9 GBX

LSE:SLA
Market: LSE
Market Cap: £7.34 billion
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