Impax Asset Management Group PLC’s (LON:IPX) target price was upped by house broker Peel Hunt after the environment-focused investor boosted its dividend policy amid strong demand for its asset class.
The stock, which has risen more than 40% over the past 12 months to around 300p, has been trading at a premium to the sector and is now expected to rise to 330p, against the previous target of 290p, which analysts said will prove conservative.
The AIM-listed fund manager, which invests in projects focused on the transition to a more sustainable global economy, is “unusual” in the sector according to analysts in that it enjoys continued high demand for its asset class.
This is set to drive growth in the long term, as the asset class offers what the analysts deem an attractive value compared to broader indices.
Impax posted operating profits of £18mln for the year to 30 September, in line with Peel Hunt’s expectations, while earnings per share came in at 11.5p, outdoing the 9.8p forecast.
A 5.5p dividend was a 34% increase compared to last year and surpassed the 4.8p estimate.
The analysts’ current forecast for next year envisage £22mln of operating profit and 12.2 EPS, which they said had the potential to be upgraded.
“Despite a more challenging backdrop, Impax has delivered a solid set of results, with outlook comments that suggest ongoing momentum in the business.”
“The results for the year to September were largely as expected, with the year characterised by strong AUM growth and continuing client demand,” analysts said in a note.