On Tuesday, Deutsche Bank adjusted its stance on Man Group Plc (EMG:LN) (OTC: MNGPY) stock, downgrading it from Buy to Hold and lowering the price target to £2.80 from the previous £3.25. The revision follows the company's first-half 2024 results, which, according to the firm, met expectations but were overshadowed by several concerns.
The bank pinpointed weakening investment performance and an anticipated significant redemption in the third quarter as key issues. Additionally, the firm noted a decline in run-rate revenue margins and emerging cost pressures. These factors have led to modifications in the bank's forecasts and the subsequent adjustment of the target price for Man Group.
The shift from a Buy to Hold recommendation reflects increasing risks associated with performance fees, capital flows, and potential share buybacks. These risks are attributed to the deteriorating short-term investment performance that the firm has observed.
Deutsche Bank's revised outlook underscores the challenges faced by Man Group in the near term, particularly with respect to its ability to generate performance fees and maintain investor confidence amidst forecasted redemptions. The bank has incorporated these concerns into its updated financial projections for the company.
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