No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Bank of America initiated coverage of wealth manager Rathbones on Wednesday with a 'buy' rating and 2,250p price target, as it said the stock remains highly undervalued on around 10x 2026 estimated price-to-earnings.
It noted that this is a 19% discount to the five-year average.
"We think the current valuation does not price in the transformational acquisition of IW&I, which has driven FUMA +67% and formed one of the largest UK wealth managers," the bank said.
"The migration of IW&I is due to complete in H125, followed by a net flow recovery and realisation of most synergies in H225E."
Bank of America said this should drive operating margin expansion to 28.4% in 2026E, versus consensus of 27.7%.
"We further expect wealth and asset management net flows to be supported by equity market momentum, softening interest rates and reallocation from US to EU equities," it added.
At 1120 BST, the shares were up 5.9% at 1,760p.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.