JUP: Rising Flows And Margins Will Still Face Structural Industry Headwinds

Analysts have nudged their price target on Jupiter Fund Management up from 150 GBp to 162 GBp, reflecting improved expectations for revenue growth, profit margins, and a lower future P/E multiple despite a slightly higher discount rate.

Analyst Commentary

While the latest target hike signals some improvement in sentiment, it still reflects a relatively cautious stance on Jupiter Fund Management's medium term prospects. The Equal Weight rating underscores a view that upside is constrained versus peers.

Bearish analysts acknowledge progress on cost discipline and stabilizing flows, but argue that the new valuation framework already prices in much of the near term operational improvement. This leaves limited margin for error on execution or markets.

Bearish Takeaways

• Bearish analysts view the modest increase in the price target as largely mechanical, reflecting market moves and updated earnings forecasts rather than a fundamentally more bullish outlook on long term growth.
• The Equal Weight stance is seen as a signal that the shares may be fairly valued on a risk adjusted basis, with concerns that any setback in net inflows or investment performance could quickly pressure the multiple.
• Cautious voices highlight ongoing structural headwinds to active asset managers, warning that fee compression and competition from low cost products could cap profitability and limit re rating potential.
• There is also skepticism that Jupiter can consistently deliver the execution needed to expand margins in a volatile market environment. This raises the risk that the upgraded target still proves optimistic if growth disappoints.

Valuation Changes

• The Fair Value estimate has fallen moderately. The model now implies a lower intrinsic value multiple than before, even though the target price is higher.
• The Discount Rate has risen slightly, from approximately 8.33 percent to 8.51 percent. This implies a marginally higher required return and risk premium.
• Revenue Growth assumptions have shifted materially higher, moving from a modest decline of around 1.46 percent to positive growth of roughly 3.79 percent.
• Net Profit Margin expectations have increased slightly, from about 14.19 percent to 15.80 percent. This reflects a more optimistic view on operating efficiency.
• The future P/E multiple has fallen significantly, from roughly 12.1x to 7.6x. This indicates that more of the upside is expected to come from earnings delivery rather than multiple expansion.