Jupiter Fund Management PLC

Jupiter Fund Management PLC (LON: JUP) is an FTSE 250 listed asset management Company focused on serving individuals and institutions through diverse saving products.

The Company will release FY21 results on 25 February 2022.

JUP had paid an interim dividend of 7.9 pence per share attributable for H1 FY21 on 01 September 2021, while the ex-dividend date was 12 August 2021.

Investment Rationale – Speculative Buy at GBX 262.80

• Robust Profitability: The underlying profit before tax witnessed an increase of around 38% to £78.2 million for H1 FY21.
• Strong Investment Performance: 72% of mutual fund Asset Under Management had shown above median performance evaluated over the last five years.
• Attractive Dividend Yield: The Company’s dividend yield of around 6.90% remained significantly ahead of the Investment Banking & Brokerage Services industry as of 29 October 2021.
• Technical Indicator: From a technical standpoint, the MACD line remained above the signal line, indicating an upside potential in the stock price.

Risk Assessments

• US Inflation: The US annual consumer inflation had reached a record 30 year high during October 2021.
• UK GDP: The UK economy witnessed a slowdown as the GDP grew quarter-on-quarter by around 1.3% during Q3 FY21, which remained merely lower-than-expected growth of around 1.50%.

Q3 FY21 Trading Update (for the three months ended 30 September 2021, as on 15 October 2021)

• Asset Under Management: The Company’s AuM stood at £60.7 billion as of 30 September 2021, an increase of around £2.0 billion from 31 December 2020.
• Positive Market Movements: The positive market movements of £1.0 billion got partially offset by £0.6 billion of net outflows during Q3 FY21.
• Net Outflows: The Company had reported net outflows of around £569 million for Q3 FY21 because of the net redemptions from mutual funds and continued weaker client demand for UK and European equity strategies.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group)

Valuation Methodology: Price/Book Approach (FY21) (Illustrative)

Conclusion

The Company had produced strong investment performance with approximately 69% of mutual fund assets under management (AUM) remaining above median performance over the last three years. Moreover, there was a significant increase in AuM and adjusted profit before tax during H1 FY21 when compared with the H1 FY20 levels. However, the increased hopes of an interest rate hike may put pressure on global equities. The stock made a 52-week high and low of GBX 307.57 and GBX 231.80, respectively.

Based on the robust profitability during H1 FY21, strong investment performance, and support from the valuation conducted above, we have given a “Speculative Buy” recommendation on Jupiter Fund Management PLC at the current market price of GBX 262.80 (as on 11 November 2021 at 08:34 AM GMT), with lower double-digit upside potential based on 1.88x Price/NTM book value per share (approx.) on FY21E book value per share (approx.).

*All forecasted figures and Industry Information have been taken from REFINITIV.

*Dividend Yield may vary as per the stock price movement.

*The reference data in this report has been partly sourced from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached or if the price closes below the support level (indicative stop-loss price).

Disclaimer

References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.

This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332. Kalkine Limited is authorised and regulated by the Financial Conduct Authority under reference number 579414.

The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation.

Kalkine does not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. Kalkine’s non-personalised advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested.

Kalkine Media Limited, an affiliate of Kalkine Limited, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.