Jefferies has moved Ashmore Group from a Hold rating to Buy and increased its target price to GBP2.85 from GBP1.70. The broker said the change follows what it views as a turning point in the emerging market cycle during the fourth quarter of calendar 2025, when Ashmore registered $2.6 billion of net new money.
According to Jefferies, about half of Ashmore's gross inflows in that period were attributable to new mandates as institutional investors rebuilt strategic allocations to emerging markets. The firm noted that once the emerging market flow cycle turns, it typically gathers momentum.
Ashmore's shares have already climbed sharply in recent periods, yet remain below levels seen in 2016, Jefferies observed. Over the past year the stock has returned 75%, and in the last six months alone it has risen 43%. Jefferies highlighted that from a comparable assets-under-management base in 2016 the company later added around $20 billion of net new money, and that the stock subsequently doubled after that accumulation.
Jefferies analyst Laura Gris Trillo said the upgrade to Buy reflects the broker's view that the emerging market cycle has shifted in Ashmore's favour. The stock trades at a price-to-earnings ratio of 14.5 and a PEG ratio of 0.24, metrics Jefferies presented as part of its case. Data from InvestingPro, Jefferies noted, indicates the shares remain undervalued relative to their Fair Value. Pro Research Reports offering deeper analysis on Ashmore and more than 1,400 other stocks are available to subscribers.
Alongside the rating change, Ashmore Group Plc published first-half 2026 financial results showing divergent signals. Profit before tax rose by 64% to reach A381.9 million, while diluted earnings per share climbed 89% to A30.101. At the same time revenue for the period amounted to $67.5 million, missing the forecasted $74.78 million by 9.74%.
Those figures paint a mixed picture: strong profitability improvements on one hand and a revenue shortfall on the other. The revenue miss may be a concern for some investors, but the pronounced increase in profit before tax and in diluted EPS demonstrates an ability to improve earnings efficiency within the reporting period.
For investors evaluating Ashmore Group's prospects, the combination of renewed institutional inflows, an analyst upgrade and improved profitability will be material considerations. The market reaction in the past year has been significant, yet Jefferies' valuation commentary and historical comparison to the company's post-2016 net-new-money growth underpin the broker's more constructive stance.
Market participants tracking asset managers and investment flows into emerging markets will likely view these developments as relevant to expectations for sector revenues and asset-management performance going forward.