Last Update 08 Dec 25

Fair value Increased 0.81%

QLT: Incremental Price Increases Will Support A Cautiously Constructive Forward Outlook

Quilter's analyst price target has inched higher to about £1.87 from £1.85, as analysts cite a series of incremental target upgrades across the Street reflecting slightly improved profitability expectations and valuation multiples.

Analyst Commentary

Recent revisions to Quilter's price targets highlight a cautiously constructive stance from the Street, with a bias toward incremental upgrades rather than wholesale re-rating.

Bullish Takeaways

Bullish analysts point to a steady series of price target increases, suggesting confidence that earnings momentum and cost discipline can support a modestly higher valuation multiple.
Multiple upward revisions within a short time frame, including the latest move to 189 GBp, are seen as evidence that execution on strategic initiatives is tracking slightly ahead of prior expectations.
The maintenance of Overweight recommendations from major houses such as JPMorgan indicates that, relative to peers, Quilter is still viewed as offering an attractive risk reward skew.
Improved profitability expectations, even if incremental, are viewed as sufficient to justify a gradual narrowing of the discount to the sector, particularly if flows and margin trends remain stable.

Bearish Takeaways

Bearish analysts and those with Neutral or Hold stances emphasize that most target hikes are small, implying limited upside from current levels and a valuation that already discounts much of the near term improvement.
The persistence of non bullish ratings, including Hold and Neutral, reflects ongoing concerns about the durability of inflows and the sensitivity of revenues to market volatility.
Some analysts remain cautious on Quilter's ability to deliver step change margin expansion, viewing current cost savings and efficiency gains as largely reflected in forecasts.
There is also a degree of skepticism that the company can fully close the performance gap with higher growth wealth and asset managers, which caps the extent of any re rating in the medium term.

What's in the News

Citi raised its price target on Quilter shares to 183 GBp from 172 GBp while maintaining a Neutral rating, indicating a modestly improved outlook but limited conviction on potential upside (Citi).

Valuation Changes

The consensus analyst price target (fair value) has risen slightly from £1.85 to about £1.87, reflecting a marginally more optimistic view of Quilter's equity value.
The discount rate has edged higher from 8.59 percent to around 8.66 percent, implying a modestly higher required return for valuing future cash flows.
Revenue growth expectations remain effectively unchanged at around minus 43.68 percent, indicating no material revision to the anticipated near term contraction.
The net profit margin has improved slightly from approximately 21.19 percent to 21.25 percent, suggesting a small uplift in expected profitability.
The future P/E multiple has increased marginally from about 18.43x to 18.57x, pointing to a slightly richer valuation being ascribed to Quilter's forward earnings.

Rising demand for wealth management, digital transformation, and pension shifts support Quilter's client growth, steady inflows, and higher recurring revenues.
Cost realignment and expanded distribution enhance operational leverage, driving margin expansion, greater market share, and improved earnings resilience.
Margin compression, regulatory cost pressures, digital competition, market volatility, and execution risk on productivity initiatives together threaten sustainable earnings and scalable growth.

Catalysts

About Quilter

Provides advice-led investment solutions in the United Kingdom and internationally.What are the underlying business or industry changes driving this perspective?

Growing demand for wealth management services, driven by the complexity of UK tax regulations (notably around pensions and inheritance) and a large intergenerational wealth transfer, is expanding Quilter's client base and assets under management (AUM), supporting recurring revenue and long-term growth.
The ongoing shift from defined benefit to defined contribution pensions places more responsibility on individuals for retirement savings, fueling sustainable demand for Quilter's advisory and managed solutions, which supports steady net inflows and increases the company's future revenue opportunity.
Continued digital investment and technology transformation (including advice transformation programs and scalable administrative platforms) are expected to enhance operating efficiency-allowing incremental asset growth to be absorbed without significant increases in cost, thus driving further operating margin expansion and earnings growth.
Success in broadening distribution channels (e.g., adviser Academy recruits, increased adviser headcount, and uptake of managed portfolio solutions on third-party platforms) positions Quilter to capture more assets, benefit from fee-based models, and further entrench market share-boosting both net revenue and earnings resilience.
Cost simplification and realignment initiatives (nearly complete by year-end) are structurally reducing the group's cost base, enabling stronger operational leverage-so as net flows and AUM grow, incremental revenues should increasingly drop through to profits, supporting improved compounding of earnings and dividends over time.

Quilter Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Quilter's revenue will decrease by 44.1% annually over the next 3 years.
Analysts assume that profit margins will increase from -0.0% today to 20.8% in 3 years time.
Analysts expect earnings to reach £168.7 million (and earnings per share of £0.12) by about September 2028, up from £-1.0 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as £118 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 18.2x on those 2028 earnings, up from -2118.3x today. This future PE is greater than the current PE for the GB Capital Markets industry at 12.6x.
Analysts expect the number of shares outstanding to grow by 0.36% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.52%, as per the Simply Wall St company report.

Quilter Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent and ongoing revenue margin attrition, driven by clients moving into lower fee tiers and the shift from higher-margin Cirilium Active solutions toward lower-margin Managed Portfolio Solutions (MPS) and passive products, risks putting sustained downward pressure on net margins and long-term earnings growth.
Rising regulatory compliance costs and sector-specific levies (such as FSCS), coupled with the requirements of Solvency II capital regulation-which Quilter cannot exit without a rewrite of UK law-will structurally elevate Quilter's cost base, potentially offsetting operating leverage gains and squeezing profit margins.
Continued digital disruption and competition from banks, insurers, and B2C digital platforms in the targeted support/guidance segment could disintermediate Quilter, especially as younger, tech-savvy clients may migrate to lower-cost, self-directed solutions, impacting Quilter's asset inflows and client retention.
Interest rate reductions and market volatility present external pressures-as noted by management, lower rates directly reduce investment revenues, while unstable markets can significantly dampen flows and average AuMA, leading to weaker revenue and profit outcomes.
Realization of productivity improvements from the adviser transformation program and technology investments is subject to lengthy, multi-year implementation and execution risk; any delay or inability to materially boost adviser efficiency will limit Quilter's capacity for scalable growth and constrain operating margin expansion.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of £1.769 for Quilter based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of £1.95, and the most bearish reporting a price target of just £1.4.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be £810.4 million, earnings will come to £168.7 million, and it would be trading on a PE ratio of 18.2x, assuming you use a discount rate of 8.5%.
Given the current share price of £1.58, the analyst price target of £1.77 is 10.9% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Profit Margin Improvements And Revenue Trends Will Drive Wealth Management Outlook