Analysts upgrade Schroders stock amid cost-cutting drive
RBC analysts have upgraded their Schroders’ stock price target after accounting for the group’s recently announced cost-cutting drive.
Analysts at the bank upgraded Schroders’ target price from 395p to 475p, while it is currently trading at 379p, having surged 17 per cent since the start of 2025.
The cost-cutting plan came as Schroders issued its annual results earlier this month, which also revealed that profit before tax had spiked 14 per cent throughout the year.
Schroders is expecting to make £150m in cost savings by 2027, with £20m already slashed in the first quarter of this year and £40m expected to be cut throughout 2025.
As a result of the plan, RBC reassessed its estimates for the group’s adjusted operating earnings, increasing them by as much as nine per cent by 2027.
RBC analyst Mandeep Jagpal said he expected Schroders‘ £603m adjusted operating profit from 2024 to continue rising, reaching as high as £811m by 2027.
However, RBC expectations are above consensus among other analysts, which estimate a more conservative £737m in adjusted operating profit by 2027.
The bank is also predicting a rebound in inflows from Schroders this year, after investors pulled £10.8bn from the company’s coffers in 2024.
Schroders’ share price
Schroders trades at just 11 times its expected earnings, a 20 per cent discount to its historic average, as well as a discount to its sum-of-the-parts valuation used listed peer multiples.
For example, competitor St James’s Place trades on a 13.8 times multiple, while Quilter trades at a 12.8 times multiple.
“These discounts highlight continued low market expectation levels for Schroders, and underpin our view of more upside risk than downside from here,” said Jagpal.
The analyst noted that the UK asset managers RBC covers have seen their share prices fall six per cent since the start of 2024, compared to a 50 per cent rise in European asset managers it covers.
