Morgans upgrades the EPS forecast for FY21 by 7.2% in FY21 and circa 2% in outer years. Pendal Group reported group funds under management (FUM) rose 4.4% for the second quarter. The Add rating is unchanged and the target price is increased $8.10 from $7.15.
The broker now has increased confidence that further meaningful net outflows can be stemmed in the JOHCM business. Several funds (in particular UK/EU value orientated funds) have regained significant investment underperformance since November 2020.
The improved performance also improves the medium-term outlook for performance fees. Morgans sees the current valuation as relatively undemanding.
Sector: Diversified Financials.
Target price is $8.10.Current Price is $7.45. Difference: $0.65 – (brackets indicate current price is over target). If PDL meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
