UBS upgraded AJ Bell to Buy from Neutral on Tuesday, maintaining a 520 pence price target. The firm cited the company’s dual channel platform and market positioning as slower earnings growth is now priced into shares. UBS raised its fiscal 2026-2029 earnings per share forecasts by 6-10%, driven by stronger market returns and higher assets under administration expectations. The target reflects confidence in AJ Bell’s ability to navigate market volatility while sustaining growth.

AJ Bell reported 17.8% net flows for its direct-to-consumer platform in fiscal year September 2025, with 3.2% in Q1 2026. The advised platform showed recovery in gross inflows during Q1 2026, though adviser consolidation continues to pose challenges. UBS expects these headwinds to ease by the end of fiscal 2026, supported by strategic investments in technology and artificial intelligence.

The firm anticipates AJ Bell can support £50 million in annual share buybacks into the medium term, representing about 3% of its market capitalization. UBS increased its cost of equity assumption to 10.8%, up from 10.3%, to account for AI and market risks. At the 520 pence price target, AJ Bell would trade at a 16.6x fiscal 2027 price-to-earnings ratio, below historical and peer averages.

This upgrade underscores UBS’s belief in AJ Bell’s resilient business model and long-term value proposition. The dual channel strategy, combined with disciplined cost management, positions the firm to capitalize on evolving market dynamics while maintaining investor confidence.