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Highlights:
- Growth Projections: Deutsche Bank forecasts customer numbers to grow by 8%, AuA by 15%, and diluted EPS by 18% annually until 2027.
- FCA Concerns: Despite concerns around interest income on uninvested cash, Deutsche Bank remains optimistic about AJ Bell's prospects.
- Investment Rating: Deutsche Bank has issued a 'Buy' rating with a target price of 500p, citing strong growth potential across key metrics.
Sentiment around AJ Bell PLC (LSE:), the wealth management platform, has been on the rise following recent concerns raised by the Financial Conduct Authority (FCA). Despite lingering risks related to interest income on uninvested client cash, analysts at Deutsche Bank remain optimistic about the company’s future growth prospects.
Steady Growth Forecasts
Deutsche Bank is forecasting annual growth for AJ Bell across all key metrics between now and 2027. The bank anticipates customer numbers to increase by 8% per year, while platform assets under advice (AuA) are projected to grow by 15% annually. Revenues are expected to see a 14% rise each year, with diluted earnings per share (EPS) growing by 18% over the same period.
Positive Outlook Amid FCA Concerns
Although the FCA has raised concerns about how interest income on uninvested client cash is managed across the sector, Deutsche Bank has expressed confidence in AJ Bell's ability to navigate these risks, stating it is "broadly comfortable" with the current situation. The platform’s solid performance and potential for long-term growth underpin Deutsche Bank’s positive outlook.
Investment Recommendation and Upcoming Update
Deutsche Bank has rated AJ Bell shares as a 'Buy,' with a target price of 500p, highlighting the platform’s growth potential. Investors are eagerly awaiting the year-end trading update, which is set to be released on Thursday, 17th October.
AJ Bell’s upcoming trading update will likely provide further insights into the company’s performance and confirm whether it continues to meet these growth expectations.
