Schroders (LON:SDR) Trading 28.6% Higher – What’s Next?

Schroders plc (LON:SDR)’s share price traded up 28.6% on Thursday . The company traded as high as GBX 599.50 and last traded at GBX 587.50. 1,147,357,875 shares traded hands during mid-day trading, an increase of 1,855% from the average session volume of 58,690,957 shares. The stock had previously closed at GBX 457.

Key Stories Impacting Schroders

Here are the key news stories impacting Schroders this week:

• Positive Sentiment: Nuveen/TIAA agreed to buy Schroders for about $14bn, delivering a takeover premium that materially revalues the company and underpins the recent rally. MarketWatch: Nuveen to buy Schroders
• Positive Sentiment: Schroders reported a strong set of results (profits up ~21%) at the time the takeover was announced, which supports the rationale and valuation for an acquirer. That earnings strength makes the deal look more attractive and credible. Investors Chronicle: Profits surge
• Neutral Sentiment: Analysts and the market are repositioning: Reuters flags the Schroders sale as a catalyst that puts other European asset managers in play, which may spur sector M&A speculation and re-rating across peers. Reuters: Sale puts peers in play
• Neutral Sentiment: Company quarterly results: Schroders reported GBX 36.60 EPS and solid margins/ROE — supportive fundamentals but now secondary to the takeover dynamics. Press release: Quarterly results
• Neutral Sentiment: Small insider purchases (Meagen Burnett, Richard Oldfield) have been reported — modestly bullish as a signal of insider confidence but too small to move fundamentals. InsiderTrades: Insider buying
• Negative Sentiment: Some investors may react negatively to the end of Schroders’ long-standing independence and family involvement (family reportedly sells out), creating uncertainty around culture, client retention and integration risks under new ownership. MSN: Family sells out / FTSE coverage

Analyst Ratings Changes

Several brokerages have weighed in on SDR. Jefferies Financial Group reissued a “hold” rating and set a GBX 420 price objective on shares of Schroders in a research note on Friday, January 9th. Royal Bank Of Canada raised their price target on Schroders from GBX 435 to GBX 440 and gave the stock a “buy” rating in a research report on Thursday, October 30th. JPMorgan Chase & Co. reaffirmed an “overweight” rating on shares of Schroders in a research note on Friday, January 9th. Citigroup reduced their target price on shares of Schroders from GBX 435 to GBX 430 and set a “buy” rating on the stock in a research note on Friday, October 24th. Finally, UBS Group reaffirmed a “buy” rating and set a GBX 455 price target on shares of Schroders in a research note on Friday, October 17th. Four investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. According to MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and an average target price of GBX 413.86.

Schroders Stock Performance

The firm has a market cap of £9.10 billion, a PE ratio of 26.33, a price-to-earnings-growth ratio of 1.28 and a beta of 1.17. The business has a 50 day simple moving average of GBX 432.17 and a two-hundred day simple moving average of GBX 401.11. The company has a quick ratio of 4.32, a current ratio of 4.90 and a debt-to-equity ratio of 12.95.

Schroders (LON:SDR) last posted its quarterly earnings results on Thursday, February 12th. The company reported GBX 36.60 EPS for the quarter. Schroders had a net margin of 12.81% and a return on equity of 8.65%. As a group, equities research analysts forecast that Schroders plc will post 33.7347131 earnings per share for the current fiscal year.

Schroders Company Profile

Schroders plc is a publicly owned investment manager. The firm also provides advisory and consultancy services. It provides its services to financial institutions, high net worth clients, large corporate, local authority, charitable entities, individuals, pension plans, government funds, insurance companies, and endowments. The firm launches and manages equity mutual funds and manages fixed income mutual funds for its clients. It also manages hedge for its clients. The firm invests in the public equity, fixed income, and alternative investment markets across the globe.