Schroders (LON:SDR) Trading Up 28.6% – Still a Buy?

Schroders plc (LON:SDR) shares shot up 28.6% during trading on Thursday . The stock traded as high as GBX 599.50 and last traded at GBX 587.50. 233,777,031 shares changed hands during trading, an increase of 728% from the average session volume of 28,238,262 shares. The stock had previously closed at GBX 457.

Key Stories Impacting Schroders

Here are the key news stories impacting Schroders this week:

• Positive Sentiment: Nuveen/TIAA agreed to buy Schroders for about $14bn, delivering a takeover premium that materially revalues the company and underpins the recent rally. MarketWatch: Nuveen to buy Schroders
• Positive Sentiment: Schroders reported a strong set of results (profits up ~21%) at the time the takeover was announced, which supports the rationale and valuation for an acquirer. That earnings strength makes the deal look more attractive and credible. Investors Chronicle: Profits surge
• Neutral Sentiment: Analysts and the market are repositioning: Reuters flags the Schroders sale as a catalyst that puts other European asset managers in play, which may spur sector M&A speculation and re-rating across peers. Reuters: Sale puts peers in play
• Neutral Sentiment: Company quarterly results: Schroders reported GBX 36.60 EPS and solid margins/ROE — supportive fundamentals but now secondary to the takeover dynamics. Press release: Quarterly results
• Neutral Sentiment: Small insider purchases (Meagen Burnett, Richard Oldfield) have been reported — modestly bullish as a signal of insider confidence but too small to move fundamentals. InsiderTrades: Insider buying
• Negative Sentiment: Some investors may react negatively to the end of Schroders’ long-standing independence and family involvement (family reportedly sells out), creating uncertainty around culture, client retention and integration risks under new ownership. MSN: Family sells out / FTSE coverage

Wall Street Analysts Forecast Growth

Several equities analysts have recently weighed in on the stock. UBS Group reaffirmed a “buy” rating and set a GBX 455 target price on shares of Schroders in a report on Friday, October 17th. JPMorgan Chase & Co. reaffirmed an “overweight” rating on shares of Schroders in a report on Friday, January 9th. Citigroup lowered their target price on shares of Schroders from GBX 435 to GBX 430 and set a “buy” rating on the stock in a research note on Friday, October 24th. Jefferies Financial Group reaffirmed a “hold” rating and set a GBX 420 price objective on shares of Schroders in a report on Friday, January 9th. Finally, Royal Bank Of Canada upped their price target on shares of Schroders from GBX 435 to GBX 440 and gave the stock a “buy” rating in a research report on Thursday, October 30th. Four equities research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the stock. According to data from MarketBeat.com, Schroders currently has an average rating of “Moderate Buy” and a consensus price target of GBX 413.86.

Schroders Price Performance

The company’s 50-day simple moving average is GBX 432.17 and its 200-day simple moving average is GBX 401.11. The company has a debt-to-equity ratio of 12.95, a quick ratio of 4.32 and a current ratio of 4.90. The company has a market capitalization of £9.10 billion, a PE ratio of 26.33, a P/E/G ratio of 1.28 and a beta of 1.17.

Schroders (LON:SDR) last issued its earnings results on Thursday, February 12th. The company reported GBX 36.60 earnings per share (EPS) for the quarter. Schroders had a net margin of 12.81% and a return on equity of 8.65%. As a group, sell-side analysts anticipate that Schroders plc will post 33.7347131 earnings per share for the current year.

Schroders Company Profile

Schroders plc is a publicly owned investment manager. The firm also provides advisory and consultancy services. It provides its services to financial institutions, high net worth clients, large corporate, local authority, charitable entities, individuals, pension plans, government funds, insurance companies, and endowments. The firm launches and manages equity mutual funds and manages fixed income mutual funds for its clients. It also manages hedge for its clients. The firm invests in the public equity, fixed income, and alternative investment markets across the globe.