On Friday, UBS announced it had increased its price target for Ashmore Group (LON:ASHM) (OTC:AJMPF) to GBP2.20 from the previous GBP1.80, while retaining its Neutral rating on the stock. The emerging markets-focused asset manager's shares currently trade close to their 52-week peak, priced at $3.12 versus a high of $3.22 – a marginal 0.95% difference.
Ashmore Group delivered notable financial results for the second quarter of fiscal 2026, reporting headline inflows totaling $2.6 billion. This marks a significant milestone as the company's first positive quarterly net inflows in over four years. Even after excluding $0.7 billion attributed to low-margin overlay funds, the asset manager exhibited robust capital entry, registering net inflows of $1.9 billion.
This inflow volume substantially outperformed UBS’s previous forecast of $0.3 billion and consensus analyst estimates of $0.1 billion. In reaction to these strong figures, UBS raised its projections for Ashmore’s quarterly inflows to a range between $2.0 billion and $2.5 billion, extending through fiscal 2028.
Alongside revised inflow predictions, UBS increased its earnings per share (EPS) outlook for Ashmore by 9% for 2026, 22% for 2027, and 35% for 2028. These upward revisions underpin the 22% boost in the price target.
However, despite the favorable earnings outlook and price target increase, UBS opted to keep its Neutral rating. The reasoning cited was the rapid 27% appreciation Ashmore's shares experienced in the prior week, indicating an already swift market reaction to positive developments.
Further highlighting Ashmore's recent performance, the company disclosed assets under management (AUM) of $52.5 billion as of December 31, surpassing analyst expectations set at $49.9 billion. The net new money figure for the second quarter stood at $2.6 billion, vastly exceeding consensus expectations of $0.1 billion, and signaling the return of positive capital inflows not seen since June 2021.
Contrasting with UBS’s upbeat stance, Deutsche Bank downgraded Ashmore’s stock rating from Hold to Sell. The bank expressed concerns regarding possible future net outflows, forecasting negative $0.5 billion net flows for fiscal years 2026 and 2027, which starkly contrasts with consensus inflow expectations.
Adding to the market uncertainty around Ashmore, CEO Mark Coombs issued cautionary remarks about prospective market disruptions akin to the 2022 Liz Truss fiscal event, particularly impacting deficit-prone countries such as the United Kingdom. These comments underline inherent risks amid the present economic climate.
Overall, Ashmore’s recent financial data evidences a turnaround supported by strong inflows and higher asset bases, yet mixed analyst opinions and economic headwinds contribute to a nuanced investment outlook.