Schroders (LON:SDR) Trading 28.3% Higher – Still a Buy?

Schroders plc (LON:SDR)’s stock price shot up 28.3% on Thursday . The stock traded as high as GBX 599.50 and last traded at GBX 586.50. 227,505,766 shares changed hands during trading, an increase of 712% from the average session volume of 28,029,219 shares. The stock had previously closed at GBX 457.

Key Stories Impacting Schroders

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

Analyst Ratings Changes

SDR has been the subject of a number of recent research reports. UBS Group reissued a “buy” rating and set a GBX 455 price objective on shares of Schroders in a research note on Friday, October 17th. Jefferies Financial Group reiterated a “hold” rating and set a GBX 420 target price on shares of Schroders in a report on Friday, January 9th. JPMorgan Chase & Co. reissued an “overweight” rating on shares of Schroders in a report on Friday, January 9th. Royal Bank Of Canada raised their price target on shares of Schroders from GBX 435 to GBX 440 and gave the stock a “buy” rating in a research note on Thursday, October 30th. Finally, Citigroup reduced their price objective on shares of Schroders from GBX 435 to GBX 430 and set a “buy” rating on the stock in a research note on Friday, October 24th. Four equities research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company. According to MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and an average target price of GBX 413.86.

Schroders Stock Performance

The company has a debt-to-equity ratio of 12.95, a current ratio of 4.90 and a quick ratio of 4.32. The stock 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 stock has a 50-day simple moving average of GBX 432.17 and a 200-day simple moving average of GBX 401.11.

Schroders (LON:SDR) last released its quarterly earnings results on Thursday, February 12th. The company reported GBX 36.60 earnings per share for the quarter. Schroders had a net margin of 12.81% and a return on equity of 8.65%. Equities 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.