UBS downgraded British investment manager Ashmore Group Plc (LON:ASHM) to a “neutral” rating from “buy,” citing that the current market valuation already reflects expectations of a strong recovery in emerging-market (EM) debt fund flows.
The brokerage said Ashmore’s shares are trading at 14.5 times forward earnings, excluding excess capital, one standard deviation above the company’s historical average.
UBS noted that this valuation effectively prices in about 10% of annualized inflows as a share of assets under management, while its forecast expects a more moderate 5% to 6% recovery over 2026 to 2028.
UBS raised its 12-month price target on the stock to 180p from 170p, reflecting a 6% increase, after marking up its earnings estimates for fiscal years 2026 through 2028 by 2% to 3%.
The upward revisions were based on stronger-than-expected EM debt performance during the third quarter of 2025 and slightly improved flow assumptions.
Still, despite the higher target, UBS said the recent rally in Ashmore shares to 182p as of Oct. 7 has balanced the risk-reward outlook, leading to the downgrade.
The brokerage highlighted that although Ashmore remains well positioned to benefit from rising allocations to EM debt amid a weaker U.S. dollar and expectations of lower U.S. interest rates, the stock’s elevated valuation leaves limited upside potential.
UBS expects outflows to continue in the September 2025 quarter before turning to modest inflows of about $0.6 billion in the December quarter.
Source :
https://www.investing.com/news/stock-market-news/ubs-downgrades-ashmore-to-neutral-says-rebound-in-em-debt-priced-in-4276878
