Standard Life Aberdeen shares could rally ahead of H1 earnings

The Edinburgh-headquartered asset manager will unveil its half-year results on Friday 7 August, with outgoing vice-chairman Martin Gilbert hinting at further M&A under new CEO Stephen Bird.

Standard Life Aberdeen (SLA) will unveil its half-year (H1) earnings on Friday 7 August, with the asset manager seeing its profits hit by the economic impact of the coronavirus pandemic.

One path for growth could be M&A, according to outgoing vice-chairman Martin Gilbert, with the asset manager well-positioned to capitalise on potential targets under new CEO Stephen Bird.

‘The strength of the balance sheet is incredible. It's one of the things that probably attracted Stephen to the business,’ Gilbert told Financial News in an interview.

‘[Stephen] has the strength of the balance sheet to build whatever he wants. I don’t think he’s taken the job to stand still. He’s taken the job to build the business,’ he added.

Consolidation within the asset management sector is rife, with SLA forming after Standard Life merged with Aberdeen Asset Management in 2017.

Declines in valuations amid the Covid-19 crisis could lead to opportunties for larger players to gobble up smaller competitors or even drive larger deals, according to a recent report on asset management M&A in the Covid-19 era by Mayer Brown.

‘Asset managers with fundamentally sound businesses and investment strategies are still inherently valuable, but market turmoil and uncertainty about when AUM and revenues will recover may lead to a downward adjustment of valuation multiples for these businesses,' the report said.

‘That, in turn, could generate renewed momentum in deal activity in the sector,’ it added.

Standard Life Aberdeen: outlook for 2020

Despite the obvious challenges the firm faces, it boasts a strong balance sheet and capital generation potential capable of returning value to shareholders.

‘The outlook for the markets and our industry in 2020 is turbulent with the additional complexity of Covid-19,’ SLA CEO Keith Skeoch said.

‘Importantly we are focused on what we can control, namely delivering for our clients, customers, colleagues and shareholders; diversifying our revenues; investing for the future and maintaining financial discipline,’ he added.

SLA managed to maintain a healthy dividend amid all the market turmoil, confirming a final dividend of 14.3p (FY19 dividend of 21.6p) at the end of March. Investors will be interested to see if the asset manager will be able to do the same in 2020.

Barclays downgrades Standard Life Aberdeen ahead of H1 earnings

Ahead of what is likely to be a disappointing set of H1 result on Friday, analysts at Barclays have downgraded SLA to ‘underweight’ and given a target price of 240p for the stock, implying a potential downside of -9%.

SLA closed at 264p per share on Wednesday, with the stock down 21% year-to-date.

How to trade stocks with IG

Looking to trade the Standard Life Aberdeen and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Standard Life’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.