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(Sharecast News) - Analysts at Berenberg trimmed their target price on Liontrust Asset Management to 360p from 410p, citing tougher market conditions and fresh outflow risks that forced it to cut earnings forecasts for the next two years.
Berenberg said equity‑market weakness, softer investor sentiment and the recent departure of two fund managers had created short‑term headwinds, prompting it to lower profit estimates by 9% for FY27 and 12% for FY28. It now expects higher redemptions, including around £200m at risk from strategies affected by the team exits, and weaker flows across the retail franchise.
The German bank forecasts net outflows of roughly £600m this quarter, with continued withdrawals from sustainable investment funds, moderating outflows from economic advantage and ongoing inflows into cashflow solution. It also reduced flow assumptions for the coming quarters, reflecting tentative demand for quality‑growth products.
Even so, Berenberg said it remained "cautiously optimistic", noting encouraging institutional engagement and the potential benefits of its recently completed River Global acquisition. Several River Global strategies, including global income and growth, were said to be performing well, and Berenberg believes Liontrust's distribution platform could help drive future inflows once integration has been completed.
Despite the earnings downgrade, Berenberg, which has a 'buy' rating on the stock, said Liontrust's valuation was already low, with the shares trading on a roughly 4x annualised enterprise value-to-underlying earnings ratio and offering a 7% yield based on an unchanged FY27 dividend. Berenberg added that while there was still material upside from the current share price, improved flows remained the key catalyst.
Shore Capital said on Monday that Sainsbury's upcoming first‑half results should leave full‑year guidance well supported, as the broker reiterated its positive stance and 340p price target on the stock.
Sainsbury's will report H127 results on 22 October, with Argos treated as an asset held for sale ahead of its expected disposal in February 2027. Shore Capital forecasts first‑half underlying earnings of £525m and sees its full‑year EBIT estimate of £1.07bn - including a £9m Argos contribution - as "well underpinned".
The broker said the disposal of Argos and the sale of financial‑services activities would leave Sainsbury's a more focused, asset‑backed and cash‑generative grocery‑led business, better positioned to deliver on its Food First strategy.
Shore Capital highlighted the continued strength of Sainsbury's food proposition under chief executive Simon Roberts, pointing to the success of Taste the Difference, improvements in Nectar and stable value messaging through Aldi Price Match.
Grocery sales rose 3.6% in the first quarter, though non‑food categories were weaker. However, the broker said the second quarter likely softened due to lower food inflation, fewer staycations and reduced demand during hot weather and the FIFA World Cup, limiting operational gearing.
Even so, it expects supermarkets to have performed well, supported by store refresh programmes, while online and convenience trends were more subdued. Shore Capital also noted growing macroeconomic headwinds, including higher fuel and energy costs, but said Sainsbury's stronger value credentials and broader brand appeal should help it navigate a tougher consumer backdrop.
Shore Capital said Sainsbury's valuation remained attractive, trading on 14.4x FY27 earnings, 5.9x EV/EBITDA and offering a 4.2% dividend yield and 7.5% free‑cash‑flow yield. It added that the shares deserved their recent re‑rating given consistent earnings progress and strong cash generation.
Reporting by Iain Gilbert at Sharecast.com
