FoggyIsle.XYZ | Market's view on Ashmore

There is an observation that the company’s weakness in the context of global interest rates is not a surprise, with further weakness potentially prompting additional buying due to the stock watcher’s limited Emerging Market exposure.
Several analysts have expressed their views and forecasts for Ashmore, with a spectrum of opinions ranging from negative to positive. There is mention of ‘weak medium to long-term investment performance’ weighing on future flows, with others suggesting that a reduction in interest rates may assist the company’s performance.
JP Morgan Cazenove reportedly lowered their target price for Ashmore to 184 last week.
It is stated that the company may receive performance fees of £16m this financial year, an increase from previous years. However, management fees, though more important, could be lower this year.
Some participants have made new investments in Ashmore due to its attractive dividend and recovery potential.
UBS has made a downward adjustment to Ashmore’s price target from 200 to 190 pence, maintaining a ‘neutral’ stance.
The company’s recent update is viewed as subpar, but there is optimism for the future as some see it as a good opportunity to buy at the 180p level with interest rates expected to fall.
It is disclosed that an AuM update for Ashmore Group is expected on the following Monday.
The company’s shares are assessed as undervalued, with a 300p target set for 2024.
Several broker notes were reviewed after the interims, with UBS maintaining a neutral stance with a 12-month target price of 205p. Numis has raised their target price from 165p to 180p, yet maintains a ‘reduce’ stance. Jefferies, on the other hand, has a ‘buy’ stance and a target price of 220p.
There is an indication that Ashmore has a defensible market position, especially compared to its competitors, due to its scale and reach in Emerging Markets.
Potential recovery for Ashmore and LION is suggested, and the dip in the share price is seen as a temporary shakeout of unstable holders.
Ashmore’s management is praised for its contrarian investment strategy and experience in the volatile Emerging Market landscape. The company’s stocks are predicted to double in 2-3 years once US interest rates start to fall.
It is stated that one third of Ashmore’s market cap is cash, and the company’s success is seen as a leveraged play on Emerging Markets coming back into favour with institutional investors.
In response to recent news, one participant’s strategy is to hold their position despite a decrease in net revenue compared to the same period in 2021.
There is optimism for a re-rating due to the recent increase in Assets under Management (AuM), which is seen to follow good performance and precede inflows.
The company’s share prices fell significantly recently, the reason for which is questioned by several stock watchers.
Lastly, it is suggested that POLR, another investment management company, is undervalued and ready for a re-rating, with a 10% dividend and a PE of 9.