Ashmore shares drop 6% after Q3 AUM miss and worst outflows in 2.5 years

Published 14/04/2025, 09:12
© Reuters

Investing.com -- Shares of Ashmore Group PLC (LON:ASHM) dropped more than 6% on Monday following disappointing third-quarter results for March 2025.

The company reported assets under management (AUM) of $46.2 billion, down 5% quarter-over-quarter and 11% year-over-year, falling 7% below consensus expectations.

Ashmore also posted $3.9 billion in outflows during the quarter, the worst result in over two and a half years, significantly worse than the consensus estimate of $0.6 billion.

These outflows were largely due to large institutional redemptions, particularly in March, from Ashmore’s local currency strategy.

While a $1.3 billion gain from market performance partially offset the decline in AUM, the reported figure is the lowest since 2009 and represents a 53% drop from the pre-COVID peak.

As a result of the weaker AUM and higher-than-expected outflows, Ashmore has revised its 2026-2027 earnings forecasts, cutting its expected earnings per share (EPS) by 9% and lowering its price target by 8%, from 180p to 165p.

The lowered AUM base is expected to lead to a similar decline in consensus EPS estimates.

Despite the setback, UBS Global Research maintains its "buy" rating on Ashmore.

While the weak Q3 results may delay any near-term upside, UBS expects flow momentum to improve in upcoming quarters, particularly as investors shift away from US fixed income toward emerging markets, where allocations are currently at two-decade lows.

UBS also points out that Ashmore’s asset management business is valued at just 5.5 times forward EPS, the lowest since the global financial crisis, indicating an attractive risk-reward profile.

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