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Investing.com -- Berenberg has upgraded Quilter plc to “buy” from “hold,” raising its price target to 195p from 150p following a review of the company’s recent performance and growth prospects.
The brokerage cited a transformation in the business over the past 18 months, which has driven a significant acceleration in client asset inflows.
Assets under management and advice rose from £119.4 billion in 2024 to an expected £133.1 billion in 2025, with net new money forecast at £8.5 billion in 2025 compared with £4.8bn in 2024.
The upgrade is supported by expectations for organic net inflows of 6-7% annually between 2025 and 2027, driven by Quilter’s investment platform, in-house products such as the WealthSelect managed portfolio service, and expansion of its financial adviser network.
The company has improved its underlying profit before tax margin from 19% in 2021 to 29% in 2024 and is projected to reach 31% by 2027.
Revenue is expected to grow at a compound annual rate of 5.8% from 2025 to 2027, with adjusted earnings per share forecast to increase from 11p in 2025 to 12.9p in 2027.
Berenberg also flagged Quilter’s strong balance sheet, with about £0.4bn in holding company cash and a net cash position of roughly £0.2bn.
This financial flexibility could support higher dividends or share buybacks; the dividend yield is forecast to rise from 4% in 2025 to 4.9% in 2027.
The valuation at 14 times forecast 2026 earnings was seen as attractive relative to growth prospects.
The broker’s revised estimates reflect higher net flow assumptions and the benefit of an equity market recovery, leading to earnings per share upgrades of 10-13% across 2025-2027.