JPM expects lower rates to boost financials in 2025
** 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
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