Abrdn Share Price Forecast March 2022 – Time to Buy ABDN?
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Shares of United Kingdom-based global investment company Abrdn (LSE: ABDN) is in the red today, after closing at £195.8 as of March 1st (18:25 GMT). Abrdn shares have been affected after Investment bank Berenberg recently cut the target price from 285p to 260p. In the past year, Abrdn’s share price has tanked 28%.
Abrdn – Technical Analysis
Abrdn’s financial statement indicates a market cap of £4.189 billion with total assets worth £10.46 billion. Revenue for 2020 was at £1.75 billion with a profit margin of 48.43% compared to £2.45 billion in 2019. After the acquisition, Abrdn has been able to recover from the £504m loss in adjusted profit (after tax) suffered in the first half of FY20. It has now posted a profit of £150m in this half-year’s report.
Moving averages for Abrdn such as Exponential Moving Average (10)(216.5), Simple Moving Average (10)(220.0), Exponential Moving Average (20)(225.8), Simple Moving Average (20)(232.1) and Exponential Moving Average (30)(230.2) are indicating a sell action. Oscillators such as Relative Strength Index (14)(25.9), Stochastic %K (14, 3, 3)(10.5), Commodity Channel Index (20)(−181.7), Average Directional Index (14)(31.5) and Awesome Oscillator(−27.4) are neutral.
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Recent Developments
Abrdn was formed out of the £11 billion merger of Standard Life and Aberdeen Asset Management in December 2017. The firm is expected to buy out the online investment service, Interactive Investor from US private equity firm JC Flowers in a deal worth £1.5 billion. Interactive Investor has a very steep rate of growth and has added 46,000 new customers last year. The move was aimed at Abrdn getting greater exposure to web-based trading, complementing its core business of asset management. The news had a positive impact on Abrdn shares, which rose 5% the following day.
In the financial year 2020, Abrdn’s total investments dropped to £ 1,227 million. This was a 23% decrease from their past four-year investment peak of £1,597 million achieved in 2017. The company considered selling or abandoning the use of the “Standard Life” name altogether in February 2021. It rebranded as Abrdn as it has sold both the Standard Life Insurance business and the Standard Life name to Phoenix. The rebranding was completed in July 2021.
Abrdn sold Parmenion, an investment and technology solutions business that supports financial advice firms, to Preservation Capital Partners in the same month as well. Owing to the recent Ukraine-Russia crisis, Steve Bird, the chief executive of abrdn, announced that the company deemed Russia and Belarus “non-investable”. He further added that Abrdn was not interested in investing in these countries for the foreseeable future and are actively reducing their holdings in the two countries.
Should You Buy ABDN Shares?
Abrdn has had a mixed bag of results from 2016 to 2020. While profits have increased from £789 million to £838 million, revenues have decreased from £18.6 billion to just £1.7 billion, a worrying sign for any investor. This also resulted in investment bank Berenberg lowering its price target. Abrdn shares have also underperformed UK indexes by 50% from 2017 to 2020.
Abrdn’s forward price-to-earnings (P/E) ratio of 16.21, compared to peers such as Schroders, which has a forward P/E ratio of just 12.79. This makes investors question whether the shares are really cheap in the first place. While the recent acquisition of Interactive Investor makes it look like the company is in the right direction, recent financial results do not echo that. There are many other bargain stocks that can provide long-term growth besides Abrdn.
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