Magellan Financial Group has lost its largest client in St James Place, which accounted for 16% of funds under management and 13% of earnings. The fact the market responded by selling the stock down -33% suggests to UBS investors are "rightly" expecting more.
The broker forecasts some -$23bn of net outflows over the next 2-3 years, and the pressure for Magellan to reduce its high flagship fund
fees has increased with retail outflows likely to accelerate. It's the early stages of a downward spiral in the broker's view.
Sell retained, target falls to $17.00 from $29.50.
Sector: Diversified Financials.
Target price is $17.00.Current Price is $19.70. Difference: ($2.70) - (brackets indicate current price is over target). If MFG meets the UBS target it will return approximately -16% (excluding dividends, fees and charges - negative figures indicate an expected loss).
© 2021 Acquisdata Pty Ltd., source FN Arena