JPMorgan upgrades Ninety One Group stock rating on improved outlook

JPMorgan upgraded Ninety One Group (N91:LN) to Neutral from Underweight, increasing the price target by 35% to GBP1.78, citing an inflection point in net flows and AuM growth. The upgrade is based on Ninety One's first positive net flow since March 2022, an improving emerging markets environment, and strong performance of the MSCI EM index. While forecasting positive net flows in fiscal year 2026 and increased EPS projections, JPMorgan cautioned that outperformance from current levels requires significantly better flows than currently forecasted, given recent strong performance and geopolitical risks.

Analysis

JPMorgan has upgraded Ninety One Group (N91:LN) to Neutral from Underweight, concurrently increasing its price target by 35% from GBP1.32 to GBP1.78. This revision is underpinned by Ninety One achieving its first positive net inflow since March 2022, a development attributed to an improving investment environment for emerging markets and the strong performance of the MSCI EM index, which has appreciated 11% year-to-date. Consequently, JPMorgan has revised its forecasts for Ninety One, now anticipating modest positive net flows for fiscal year 2026 instead of previously projected outflows. This shift contributes to an estimated 7% increase in assets under management forecasts and a significant 17% average uplift in adjusted earnings per share projections. JPMorgan views these developments as indicating "an inflection point for Ninety One’s net flows and AuM growth." However, the investment bank also tempers this positive reassessment by noting Ninety One's recent strong share price performance and persistent geopolitical risks, suggesting that for the shares to outperform from their current levels, the company would need to demonstrate "much better flows than the ones embedded in our updated forecasts."

Key Decisions for Investors

• Investors should acknowledge the improved fundamental outlook for Ninety One Group, reflected in JPMorgan's Neutral rating and increased price target, particularly if previously maintaining an underweight stance.
• Monitor Ninety One's net fund flows closely, as sustained recovery beyond JPMorgan's modest positive forecasts for FY2026 will be crucial for outperformance, alongside the broader emerging market sentiment and MSCI EM index trends.
• Exercise caution regarding further significant share price appreciation from current levels, given the stock's recent strong run and prevailing geopolitical risks, unless flow data materially exceeds current expectations.