Share Prices & Company Research

Market News

13 Dec 2024 | 15:17

Broker tips: Greggs, Impax Asset Management

(Sharecast News) - RBC Capital Markets recommended that investors "buy the dip" on Friday as it initiated coverage of bakery chain Greggs with an 'outperform' rating and 3,240.0p price target. "With a recovering LFL exit rate in September and the group's ability to mitigate labour costs increases, we believe the shares have been oversold," it said. "Cost pressures will grow, but we expect core customer wage increases and improving household finances to offset the vast majority."

RBC forecasts FY23-26 organic growth compound annual growth rate of around 11%, with a roughly sever-year rollout, keeping this "high-quality compounder" firmly in growth territory, supporting a return to its historic multiple.

The Canadian bank added that its price target justified an 'outperform' rating and also stated there was potential for further cash returns as capex eases.

Analysts at Berenberg lowered their target price on Impax Asset Management from 560.0p to 510.0p on Friday after news broke that the group's mandate to manage St James's Place's sustainable and responsible equity fund was expected to end in February 2025.

Berenberg said the SRE fund accounted for roughly £5.2bn of Impax's assets under management, or approximately 14% of total AuM.

The German bank also noted that it understands that the mandate termination was primarily driven by St James's Place's desire to diversify SRE using an alternative investment strategy.

"We have updated our forecasts for Impax, with a circa 7% reduction in our FY25 EPS estimate and a circa 6-7% EPS reduction in the outer years. This assumes that the SJP mandate ends in Q225. We reduce our FY25 revenue forecast by circa 5% partially offset by a circa 4% reduction in operating costs," said Berenberg.

"Operating costs are lowered in our forecasts as Impax typically pays out circa 40-45% of pre-bonus profit as remuneration (our forecasts assume circa 43% is paid out in FY25)."
Get in touch today
Join Redmayne Bentley
Talk to us now about opening a new portfolio or transferring your portfolio from another provider
0113 243 6941
Get in touch today
Contact your local office
Contact your local office to find out more
The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.