Jupiter Fund Management PLC (LON:JUP) shares headed into orbit on Wednesday as City broker Peel Hunt slapped a ‘buy’ rating on the fund manager after it pinched a contract from under-fire rival Neil Woodford.
After a tricky 12 months which has seen most of Jupiter’s key funds suffer billions of pounds of outflows, analysts now see the “balance of risk shifting towards the upside”.
“Jupiter’s flows look to have stabilised, although some of the larger funds are still declining and investment performance relatively mixed,” said Peel Hunt in a note to clients.
“Nevertheless, we upgrade our forecasts (by 11%), driven by higher performance fee expectations and assets under management (AuM) assumptions.”
Woodford’s loss is Jupiter’s gain
The number crunchers added that AuM – the total market value of a fund’s investments – will get a boost from the recent contract Jupiter won to run the £300mln Omnis Income & Growth fund.
That fund was managed by Neil Woodford until his troubles earlier this month, when he was forced to suspend his flagship Woodford Equity Income fund amid concerns over unlisted holdings that were proving hard to sell.
AuM has also been improved by the turnaround in fortunes of Jupiter’s largest fund.
The Dynamic Bond fund endured outflows of more than £4bn in 2018, but Peel Hunt estimates it has generated net inflows of £495mln so far in 2019.
Jupiter shares were up 2.9% to 424p in early-afternoon trading, still some way below Peel Hunt’s price target of 480p, which it increased from its previous target of 375p.