Shares of Ashmore Group Plc rose 4% on Tuesday following a bullish note from Jefferies, which upgraded the emerging-markets specialist to a buy rating and increased its price target to 285 pence from 170 pence. The brokerage's revised valuation reflects updated 2027 estimates and a more optimistic outlook for net new money (NNM) in fiscal 2026 and 2027.
Jefferies highlighted what it described as the first meaningful improvement in Ashmore’s flow trajectory in several years. Management reported net new money of $2.6 billion in the firm’s fiscal second quarter of 2026, and Jefferies said roughly half of the gross inflows were tied to new mandates. Prior to publication of the note, Ashmore shares had closed at 239 pence.
In deriving its new target, Jefferies rolled forward its 2027 assumptions and applied a 13 times price-to-earnings multiple to 2027 adjusted earnings per share, then added surplus capital of about 67 pence per share. The brokerage pointed to an historical parallel in fiscal 2016, when assets under management (AUM) were at similar levels and cumulative inflows of about $20 billion followed over the subsequent two years, noting that despite recent gains the shares remain below FY16 levels.
Jefferies described the quarterly NNM number as representing an annualized rate above 20%, while cautioning that such a pace is unlikely to repeat. The firm emphasised the composition of the inflows as the clearest sign of an early-cycle recovery: new mandates typically indicate a strategic, top-down decision by clients to rebuild exposure to emerging markets. Management characterised the prospective pipeline as heavily skewed towards new client wins and flagged rising interest in equity strategies.
On product mix, equities and alternatives made up about 20% of AUM and accounted for roughly 30% of management fees in fiscal 2025, which Jefferies described as contributing higher-margin, less cyclical revenue streams. Retail channels comprised around 4% of AUM in the first half of fiscal 2026, down from approximately 15% before the COVID-19 pandemic.
Jefferies left its fiscal 2026 earnings-per-share estimate largely unchanged at 6.70 pence, slightly below its prior 6.74 pence estimate. Revenue for fiscal 2026 was held at £145 million, while fiscal 2027 revenue was raised to £172.5 million, above consensus estimates of £142.4 million for 2026 and £159.8 million for 2027. Profit before tax was forecast at £59.6 million for fiscal 2026, rising to £75.8 million in fiscal 2027. The brokerage maintained dividend guidance of 16.90 pence per share from fiscal 2025 through fiscal 2028.
In its note, Jefferies also pointed to recent market transactions, citing the acquisition of Schroders by Nuveen at about 16 times forward earnings as an example of the premium afforded to scalable, specialist platforms. The firm argued that the recent share-price rally had not fully reflected the potential for a multi-quarter rebuild in NNM and suggested there is scope for EBITDA margins to recover from 31% reported in the first half of fiscal 2026.
Context and implications - Jefferies’ upgrade is grounded in specific flow data and margin assumptions rather than broader market forecasts. The emphasis on new mandates and an improving pipeline underpins the broker's revised revenue and profit projections for fiscal 2026 and 2027, and supports the higher 2027 valuation multiple it applied.
Investors will likely monitor subsequent NNM releases, the composition of future inflows, and margin trends to assess whether the uptick observed in the fiscal second quarter of 2026 signals a durable turnaround.