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Investing.com - Citi downgraded Man Group Plc. (LSE:LON:EMG) (OTC:MNGPY) from Buy to Neutral and slashed its price target to GBP1.85 from GBP2.65, citing concerns about the performance of key AHL strategies.
Man Group shares have fallen approximately 20% year-to-date, significantly underperforming compared to Citi’s European Diversified Financials coverage, which is up 5% during the same period.
While Citi maintains a constructive view on Man Group’s medium-term growth prospects, the bank expressed concern that recent weak performance in high-margin AHL strategies could persist, potentially resulting in outflows and weak performance fee generation.
Citi does not expect key AHL strategies to generate performance fees until 2027, resulting in estimates approximately 20% below consensus for fiscal years 2025-2027.
The bank noted that while Man Group’s valuation is not demanding and offers significant optionality to any recovery in performance, the significant downside risk to consensus estimates reduces the urgency for investors to own the shares at present.
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