The share price of investment management company abrdn PLC (GB:ABDN) fell by 11% yesterday after the company’s assets under management declined in its first-half earnings for 2023. Challenging market conditions harmed the company’s financial results during the first half of the year.
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abrdn reported a decrease of almost 1% in assets under management and administration, amounting to £495.7 billion as of June 30, down from £500.0 billion six months ago. During the first half of 2023, abrdn noted client withdrawals totaling £4.4 billion, marking a 16% increase compared to the corresponding period last year. This was mainly due to short-term investors losing hope in an environment of high inflation and interest rates.
Turning to the brighter side, the operating profit demonstrated a 10% rise, reaching £127 million, while net operating revenue grew by 4% to £721 million. Furthermore, the company’s pre-tax loss of £169 million for the first six months of 2023 was lower than the loss of £326 million from a year ago.
The company said that it is confident in its strong business model as it pushes on with its restructuring within the framework of a three-year strategic plan. It is also making steady progress towards achieving its goal of £75 million in cost savings within the Investments division.
Is Abrdn PLC a Good Buy?
Despite the Sell recommendations from analysts, the shares were in a safe space and had gained 20% YTD. Over the last 12 months, the shares have seen a 47% increase, marking their place among the top gainers on the FTSE 100 index. This was mainly due to the company’s buyback program worth £300 million in 2022. In its recent results, it announced an additional buyback of £150 million.
Recently, the stock lost all its Buy ratings, creating more panic among investors. Analysts perceive the results as a combination of varied figures, indicating a prolonged turnaround process. The share buyback decision is seen as a rational move by the company, providing slight compensation.
Moving forward, analysts aren’t so bullish on the share price and are cautious about the company’s outlook owing to the challenges in the industry landscape. The company has encountered difficulties in maintaining the attractiveness of higher-risk investments, which is expected to continue.
What is the Price Target for abrdn?
ABDN stock has a Moderate Sell rating on TipRanks based on four Sell and two Hold recommendations. The average price forecast is 190.7p, which is 1.82% lower than the current price level.
