Proactive Investors - St. James’s Place PLC (LON:SJP) is 0.7% higher today, although down 44% year-to-date, boosted by an upgrade by UBS.
The Swiss bank has moved the stock to buy from hold with a reduced price target of 735p, down from 990p.
It accepts some of the underperformance this year is justified given regulatory and macro headwinds but says the current valuation "screens cheap."
Significant EPS cuts, long-term fee pressure, and a high cost of equity, reflecting uncertainty under a new charging structure, already appear priced in, in UBS's opinion.
However, significant long-term growth prospects (up to 24% p.a.), do not appear to be reflected in the valuation, it added.
With the stock now trading at a 14% discount to peer QLT, where historically it has traded at a 30% premium, the broker has shifted its rating to buy on valuation grounds.