Citi downgrades Man Group on 'significant performance earnings risks'
Citi downgraded Man Group plc on Wednesday to 'neutral' from 'buy' and slashed the price target to 185p from 265p on "significant performance earnings risks".
It noted the shares have fallen around 20% year-to-date, notably underperforming Citi's European Diversified Financials coverage up 5%.
"While we are constructive on the group's medium-term growth outlook, we are concerned that recent weak performance of key (high-margin) AHL strategies could continue, potentially resulting in both outflows but also weak performance fee generation," Citi said.
"Indeed, we do not expect key AHL strategies to generate performance fees until 2027, resulting in Citi estimates circa 20% below consensus over FY25-27."
Citi said the stock's valuation is not demanding and offers significant optionality to any recovery in performance, but with significant downside risk to consensus estimates, it sees "less pressing need for investors to own the shares now", hence the downgrade.
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.
