Jupiter Fund Management [LON:JUP] is currently looking like one of the best quality stocks in the UK financial services sector. The shares have reflected this, jumping from 70 pence in April to currently trade at 122 pence.
It has been a great run for a listed fund manager operating in a sector under enormous fee pressure. But Jupiter itself continutes to expand: just this week Jupiter announced it had struck a deal to acquire fund manager CCLA.
Jupiter also took the opportunity to let shareholders know it would be returning half of its performance fee-related revenue to investors this year in the form of a special dividend, share buyback or potentially both. This would be in addition to ordinary dividend and share buyback plans.
The deal to acquire CCLA is being welcomed by investors, with further frantic buying of the stock Thursday, driving it up for its biggest daily increase since March 2020. The acquisition should help Jupiter to increase its scale, adding new clients and potentially delivering cost savings to the tune of £16m by the end of 2027.
The news was welcomed by Morgan Stanley, which upgraded Jupiter shares from underweight to equal, raising the target price to 132 pence. This is likely to be a ceiling that Jupiter will exceed on current share price performance.
Can Jupiter Fund Management shares keep this up?
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