JPM expects lower rates to boost financials in 2025
10/12/2024 09:30
** J.P.Morgan expects the European financial market to
benefit from lower interest rates in 2025, but warns of risks of
instability from political issues and market consolidation
** Lower rates will encourage investment in riskier areas
such as private markets and wealth management, it says
** It favours EQT EQTAB.ST amid private market managers
due to its projected 33% annual 2024-2027 earnings growth, while
it warns that high expectations for returns may lead to
short-term disappointment in the sub-sector
** The broker sees the challenging environment for
traditional asset managers to continue in 2025, despite some
relief from lower rates
** It upgrades DWS DWSG.DE to "overweight" from "neutral",
as it expects passive management to be dominant, and cuts
Schroders SDR.L to "neutral" from "overweight", citing
challenges in some of its active management areas
** It also cuts Ninety One N91.L to "underweight" from
"neutral", citing a negative outlook on emerging market
investments
** JPM favours St. James's Place SJP.L among platform and
wealth managers, forecasting its 2025-2028 earnings to grow 17%
annually, expecting investors to prefer scalable payers
Rating changes:
COMPANY NEW RATING OLD RATING NEW PT OLD PT
DWS Group overweight neutral EUR 48.00 EUR 42.60
Ninety One underweight neutral GBP 159 GBP 165
Schroders neutral overweight GBP 353 GBP 407
(Reporting by Vera Dvorakova)
((vera.dvorakova@thomsonreuters.com))