Broker snap: Ashmore price target lifted by KBC

15th Jul 2010 11:55

KBC Peel Hunt has bumped up its earnings forecasts for Ashmore Group after the emerging markets asset manager's trading update on Wednesday.The broker has factored in the higher than expected assets under management (AuM) figure Ashmore announced and upgraded its forecasts for the year to end-June 2010 by 12%. It is now predicting profit before tax of £201.6m, up from its previous estimate of £180.2m. The broker is assuming the dividend will remain unchanged.The forecast for the year to end-June 2011 has been bumped up by 7% to £189.9m."As always, forecasting the level of performance fees in any period is an inexact science. We have kept our assumptions relating to next year unchanged, purely adjusting for the higher AuM. We therefore expect performance fees of £37.2m for the year, clearly well below the level achieved in 2010; this reflects the high returns generated over the last year in, primarily, external debt and high yield. Also, with more institutional business being won, in many cases there is no performance fee element," KBC analyst Stuart Duncan said.The broker has reiterated its "buy" recommendation and moved up its price target from 305p to 320p.