On Friday, RBC Capital Markets initiated coverage on Polar Capital Holdings (POLR:LN) stock with an Outperform rating and a price target of GBP6.00. The firm's analysts pointed to an expected return to net inflows for the asset management company, which they believe will drive growth above the sector average and provide a catalyst for the company's shares to re-rate.
Polar Capital Holdings is seen to benefit from increased client demand for its distinctive and high-performing investment products, particularly in a UK retail environment that is predicted to improve throughout 2025. This outlook is further detailed in an accompanying sector report by RBC Capital Markets.
The analysts project that Polar Capital's adjusted profit before tax (PBT) will surpass consensus estimates by 4%, 5%, and 6% for the fiscal years 2025 to 2027, respectively. Additionally, they forecast a dividend per share (DPS) growth rate that is higher than current market expectations.
RBC Capital Markets also highlighted Polar Capital's valuation, noting that the current 12-month forward price-to-earnings (P/E) ratio of 9.5x represents a 21% discount to its historical average. This, according to the analysts, offers an attractive entry point for investors. The firm's positive stance on Polar Capital Holdings comes as the company prepares to navigate an improving economic landscape in the coming years.
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