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(Sharecast News) - Canaccord Genuity has raised its rating for Jupiter from 'sell' to 'hold', saying that the fund manager is taking actions to "right-size the business and rebuild scale".
The broker has doubled its target price for the stock from 60p to 120p, hailing management's actions to cut costs and use surplus capital for attractive M&A.
"Material internal cost reductions were announced in May, delivering an average c.25% earnings uplift over FY25/26. The immediately accretive acquisition of CCLA was announced in July, which we estimate delivers 17% accretion pre-cost synergies and c.40% including fully realised cost synergies," Canaccord said in a research note.
However, prospects for organic revenue growth at Jupiter still remain "fragile and less within management's control", the broker said, highlighting the "active to passive shift" - investors are increasingly moving investments from actively managed funds to passively managed funds - and revenue margin compression as constant headwinds for the business.
"Jupiter reported 'rebuilding of momentum' in institutional flows but higher margin retail net outflows are yet to show improvement, meaningful and consistent evidence of which would make us more positive."
Jupiter's share were trading 1% higher at 125.2p by 1350 BST.
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