NVIDIA launches Jetson Thor robotics computers for physical AI systems
On Tuesday, Morgan Stanley (NYSE:MS) updated its financial outlook for Abrdn Plc (ABDN:LN) (OTC: SLFPY), raising the investment firm's price target from GBP1.47 to GBP1.49 while maintaining an Underweight stock rating. Trading at a P/E ratio of 8.7 and offering a substantial 9.1% dividend yield, the company has maintained dividend payments for 18 consecutive years. The adjustment comes in the wake of Abrdn's fourth-quarter trading update, which prompted the analysts to make slight revisions to their forecasts.
Bruce Hamilton, the analyst at Morgan Stanley, noted that the company's assets under management (AUM) were slightly above expectations at £511 billion, compared to the projected £510 billion. However, the firm experienced a less favorable sales mix, with higher margin equity outflows surpassing estimates, as opposed to the inflows into lower margin money markets and Quant, which performed marginally better than anticipated. According to InvestingPro analysis, despite these challenges, Abrdn maintains strong financial health with a current ratio of 225.8, indicating robust liquidity management.
Despite the changes in AUM and sales mix, Morgan Stanley's earnings per share (EPS) estimate for 2024 remains unchanged. The forecast for 2025 and 2026, however, sees a slight increase in top-line estimates for Abrdn's Personal (Interactive Investor) segment due to stronger customer growth momentum. The company secured 32,000 net new clients in 2024, surpassing Morgan Stanley's previous estimate of 25,000. InvestingPro data reveals that Abrdn has maintained profitability with a gross margin of 95.5% in the last twelve months.
The revised estimates for the subsequent years have led to an EPS increase of 1-2% for 2025 and 2026. Correspondingly, the sum of parts-based valuation of Abrdn has been increased by 1% to 149p. This valuation reflects the aggregated value of the company's different business segments.
Hamilton's commentary highlights the balance between the modestly positive client growth in the Personal segment and the challenges faced with the sales mix in the fourth quarter. The updated price target and valuation are a direct result of these detailed adjustments to Abrdn's financial projections.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.