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Investing.com - Jefferies has initiated coverage on Rathbones Group PLC (LON:RAT) (OTC:RTBBF) with an Underperform rating and a price target of GBP16.50, despite the stock currently trading at $25.61 and showing a strong 25.7% year-to-date return. InvestingPro data indicates the stock is undervalued based on its Fair Value assessment.
The research firm described Rathbones as a "solid business" but noted that higher growth and operational gearing are available elsewhere in the wealth sector.
Jefferies expressed concern that traditional discretionary fund managers like Rathbones will face pressure from advice businesses, platforms, and up-market players.
The firm acknowledged that Rathbones offers "quite attractive" dividend yield but does not expect significant expansion in either revenues or operating margins.
The GBP16.50 price target reflects Jefferies’ cautious outlook on the wealth management firm’s competitive positioning within the evolving financial services landscape.
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