Jefferies boosts Ashmore rating to Buy and lifts target to 285p from 170p

Jefferies boosts Ashmore rating to Buy and lifts target to 285p from 170p

Jefferies Downgrades Ashmore to 'Hold' Amid Emerging Market Uncertainty

Jefferies has downgraded its rating for Ashmore Group plc (ASHM.L) to "hold" from "buy," citing ongoing macroeconomic and geopolitical challenges affecting emerging market (EM) investments. The firm also reduced its price target to 170p from 220p, reflecting a more cautious outlook for the asset manager's near-term performance.

The broker highlighted that persistent uncertainty around the timing and magnitude of Federal Reserve rate cuts has dampened demand for EM assets. Currently, markets are pricing in only 65 basis points of Fed easing in 2025, a significant decline from 140 basis points projected at the end of September 2024. This, coupled with a stronger U.S. dollar, has reduced the yield advantage of EM debt and local currency investments, further weighing on inflows. Jefferies noted that potential new U.S. tariffs could also disrupt global supply chains and investor sentiment for EM equities.

The firm expects net new money for Ashmore to remain negative until at least the first half of fiscal year 2026 (1H26), aligning with broader macro trends. While Jefferies acknowledged defensive fundamentals—such as Ashmore's 50% excess capital relative to market cap and a secure 10% dividend yield—it concluded that the revised 170p price target offers limited upside. "Macro catalysts are needed for a meaningful shift in EM flows," the report stated.

Ashmore's shares traded lower, down 3.7% to 150p at 10:35 GMT on February 24, 2026, reflecting broader market concerns. Investors are now awaiting clearer signals on Fed policy and geopolitical stability to reassess EM exposure.

This downgrade underscores the challenges facing EM-focused asset managers in a high-uncertainty environment, with Jefferies advising caution until key macroeconomic risks abate.