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Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

JPMorgan reiterates 'underweight' on Ashmore, says re-rating has gone too far

(Sharecast News) - JPMorgan Cazenove nudged down its price target on Ashmore on Monday and reiterated its 'underweight' rating as it argued that the re-rating has gone too far. The bank, which trimmed its price target to 184p from 185p, noted that Ashmore's shares have rebounded by around 8% in the past month, driven by better market performance and a slower pace of net outflows in Q4 23.

It said that even though fiscal H1 24 results beat what seemed to it like a "stale" consensus, the H1 24 adjusted EBITDA was 10% below its expectations. As a result, the bank cut its adjusted earnings per share estimates by around 9% on average for FY24-27E.

JPM said that even though it forecasts a gradual net flow recovery, it does not expect a return to double digit $bn net inflows.

"At 18.9x 2025E price-to-earnings (or 12.7x excluding excess capital) Ashmore is the most expensive stock within our traditional asset managers coverage," it said.

"We believe the circa 25% multiple rerating since October 2023 has gone too far, and reiterate our underweight recommendation."

At 0850 GMT, the shares were down 2.3% at 224.26p.

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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