Broker tips:St.James Place, Croda, Ashmore

25th Feb 2014 11:50

Shore Capital has reiterated its 'buy' stance on financial advisory firm St James's Place after the company reported an 'excellent' set of final results.The broker, which set a price target 795p, said 2013 results highlight that "in financial terms the company is going from strength to strength", with hefty increases in underlying cash, new business profit, new business, funds under management and the dividend."The shares have had a terrific run in recent months and now trade at a 30% premium to our 2014 net asset value of 610p (upgraded by around 2%) reducing to 21% in 2015 (against 655p)," Shore Capital said.It noted a forward yield of around 2.7% against a 2014 dividend forecast which has been upgraded to 21.2p from 17p."We believe the stock has further to run, given the growth prospects of the business, both organic and from a likely acquisition in the Far East, and the increasingly cash-generative nature of the back-book," Shore said.Credit Suisse maintained its outperform rating on natural chemicals company Croda after its better-than-expected fourth quarter numbers, though it remains concerned about the impact of currency headwinds on the group over 2014. The broker notes that Croda is guiding the market to an adverse currency impact of £9m for a proforma 2013 using spot FX levels. At the same time, Croda expects to deliver constant currency sales and profit growth in 2014. Croda, which makes chemicals used in personal care, crop care and home care products, said adjusted pre-tax profit for the year ended December 31st increased 5.4% to £251.4m. Revenue increased 2.4% to £1.077bn.The group's fourth quarter EBIT of £62.8m was 3% ahead of the broker's expectations and 2% ahead of consensus.Credit Suisse has a 2850p target price for the stock. Below par interim results at Ashmore have led to a downgrade by Canaccord to "hold".Describing the numbers, which came in at 25% below consensus, as "lacklustre", the broker reduced its target price to 325p.Canaccord said that Ashmore's assets under management are more or less maintained and "given we don't bake in a strong level of performance fees in our estimates" it attributed the fall in overall revenues to margins."New mandate win levels were roughly on par with last year's levels (£7bn vs £8bn gross inflows). Given the margin issue, we look for more guidance...on the margin levels at which new business is being written on," it said."Given a lack of seasonality, full year earnings per share consensus is likely to trend towards 18p. Ashmore would thus be trading at 18 times earnings based on expected revised consensus. Consensus and our estimates are expected to rebase downwards towards," Canaccord said.AB