Schroders (LON:SDR) Trading Up 28.7% – Still a Buy?

Shares of Schroders plc (LON:SDR) were up 28.7% during mid-day trading on Thursday . The company traded as high as GBX 599.50 and last traded at GBX 588. Approximately 235,726,484 shares changed hands during mid-day trading, an increase of 733% from the average daily volume of 28,303,242 shares. The stock had previously closed at GBX 457.

Schroders News Roundup

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

Analysts Set New Price Targets

A number of research firms have weighed in on SDR. JPMorgan Chase & Co. reiterated an “overweight” rating on shares of Schroders in a report on Friday, January 9th. UBS Group restated a “buy” rating and set a GBX 455 price target on shares of Schroders in a research report on Friday, October 17th. Royal Bank Of Canada increased their price objective on Schroders from GBX 435 to GBX 440 and gave the stock a “buy” rating in a report on Thursday, October 30th. Citigroup lowered their price objective on Schroders from GBX 435 to GBX 430 and set a “buy” rating for the company in a research report on Friday, October 24th. Finally, Jefferies Financial Group restated a “hold” rating and set a GBX 420 target price on shares of Schroders in a report on Friday, January 9th. Four analysts have rated the stock with a Buy rating and three have given a Hold rating to the stock. Based on data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of GBX 413.86.

Schroders Price Performance

The company has a current ratio of 4.90, a quick ratio of 4.32 and a debt-to-equity ratio of 12.95. The company has a market cap of £9.10 billion, a PE ratio of 26.33, a P/E/G ratio of 1.28 and a beta of 1.17. The firm has a 50 day moving average of GBX 432.17 and a two-hundred day moving average of GBX 401.11.

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

About Schroders

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.