Aberdeen Asset Management set for full-year release

Aberdeen Asset Management will announce its full-year results on 30 November, and traders are expecting sales to have increased up to £1.154 billion from last year’s £1.118 billion.

Source: Bloomberg

At the same time the company’s earnings per share is called lower dropping from 311p down to 298p. This, however, should not prevent its full-year pre-tax profits from climbing to £493.10 million, an increase of 39% from last year’s figure of £354.60 million.

Operating in the investment arena Aberdeen Asset Management will be only too aware of how important an income yield is, and with the company’s shares at these levels it currently offers one of the most attractive returns in the FTSE with a 6.1% gross dividend yield. Part of the reason for this attractive yield has been the 25% collapse in the company’s share price over the year, as investors have worried about the company’s exposure to emerging markets.

Due to the poor performance of the shares, speculation has arisen that the company could fall prey to a takeover. In an effort to rebuff this, CEO Martin Gilbert has confirmed that the company is considering a number of acquisitions, possibly as many as five, that would help diversify its exposure. These measures look to have been taken as this could see the company post the tenth consecutive quarter of net investor outflow.

The downturn in emerging market performance has seen the company review its headcount, and a reduction in total numbers could well be announced. Although, it appears likely that the investment managers would be ring-fenced from any staff reductions.

Institutional analysts’ expectations for Aberdeen Asset Management are neutral with eleven holds, two buys and five sells of the 18 firms following the company. The average twelve-month price target for the company is 330p, a 3% discount to the current share price for the firm.

Technical analysis from Joshua Mahony MSTA, Market Analyst at IG.

The Aberdeen Asset Management share price has been on the wane since the 2015 peak in April. However, since early October we have seen the price stage a recovery of sorts, rising almost 30% in a month. This is clearly a testing time for the share price, with new highs followed by new lows and thus the overall direction can be difficult to call.

As things stand, price has broken back below the 328p support and 372p to become more bearish. Thus given the selloff coming into the recent 38.2% retracement higher, a bearish outlook remains unless price regains the 372p level.

A close above 372p would point towards resistance levels of 376p, 400p and 414p. Until that occurs, further downside seems likely, with 328p, 318p and 289p the main support levels to watch.

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