Shares in AJ Bell fell by 4% on Thursday after long-standing investor, Invesco Asset Management Ltd, sold a 9.3% stake in the investment platform.
But Numis raised its recommendation on the shares to ‘hold’ from ‘reduce’ and left its target price at 346p.
“The pricing points AJ Bell have adopted are attractive for customers and while we believe price is only one component of the decision as to where to hold investments, it rightly remains an important one for advisors,” Numis said.
“Consequently, we see AJ Bell as being well placed as advisors review which platform they choose to place their clients investments on.”
Since AJ Bell listed on the London Stock Exchange, its shares have performed strongly, rising from an offer price of 160p to 401p at the time of writing.
Numis said it sees AJ Bell offering fair value in the short term at the placing price but continues to believe the investment case remains “compelling” on a medium to long term basis.
The broker pointed out that AJ Bell’s assets under administration (AuA) have a compound annual growth rate of 22.4% since September 2007, compared to the 17% achieved by the FTSE All-Share index.
“Furthermore, in no year out of the past 11 years has the AJ Bell AuA gone down, not even during the financial crisis of 2008/09,” Numis said.
“We see structural growth in this industry and we expect AJ Bell to continue to win market share and see its operating margin increase as it does so.”