The FTSE 250 funding agency aberdeen group (LSE: ABDN) was as soon as dubbed the “most shorted company in the UK”. 

CityAM made the remarks in December 2024, though Ocado and Domino’s Pizza have attracted much more shorts since. Clearly, that’s not an accolade that any firm strives to attain. 

But not everyone seems to be so pessimistic. Deutsche Financial institution maintains a Purchase score on the inventory that it reiterated this Wednesday, 2 April — albeit with a minor lower in goal price.

So with a 9.6% yield and a reasonably spectacular fee observe document, why are analysts so down on aberdeen? It’s a well-established firm that’s been round in a single kind or one other for 200 years. Nevertheless, a current string of unfavourable occasions has introduced its operations into query.

That could be trigger for concern, so I made a decision to research additional.

A wealth administration powerhouse

Previously referred to as abrdn, aberdeen is a world funding firm headquartered in Edinburgh, Scotland. It affords a variety of asset administration companies, together with fairness investing, fastened earnings, liquidity, sovereign wealth funds, actual property, and personal markets. As of December 31, 2024, it managed and administered £511bn in property beneath administration and administration (AUMA), with operations in over 25 areas worldwide.

Relationship again to 1825, it has undergone a number of modifications. Most just lately, it merged with Customary Life solely to promote that arm to Phoenix Group a couple of years later. In 2021, it rebranded to abrdn, a controversial capital- and vowel-free title supposed to attraction to a youthful, digital-focused world.

Issues have been rocky ever since, however this 12 months it’s exhibiting indicators of a possible restoration.

Development and dividends

Previous to Covid, the corporate loved spectacular dividend progress. It raised the ultimate quantity by round 7% yearly, climbing from 11.7p per share to 21.6p (between 2008 and 2019).

However the pandemic compelled a 32% lower down to 14.6p per share, the place it has remained ever since. The result’s destructive progress over the previous 10 years, throughout which period the share price has dropped 72.7%.

Understandably, shareholders are disillusioned and turning into impatient.

Restoration potential?

Lately, the agency underwent a number of essential administration modifications and a catastrophic rebranding. But by means of all of it, it has managed to uphold robust monetary efficiency.

2022 noticed a short interval of unprofitability, but it surely has since raised its web margin from -36% to fifteen.7%. For 2024, it reported a 2% improve in adjusted working revenue to £255m and a 3% rise in property beneath administration.

The improved efficiency follows a renewed give attention to core funding administration companies and is the almost definitely purpose Deutsche Financial institution stays optimistic concerning the inventory.

The scenario stays tense 

The controversial rebranding has been principally reversed and CFO Jason Windsor is standing in as interim CEO after Stephen Hen stepped down. Whether or not a brand new CEO can flip issues round for the corporate stays to be seen.

Though Deutsche Financial institution nonetheless has a Purchase score on the inventory, it decreased its price goal from 200p to 195p. It hasn’t traded above 195p since August 2023 — and traded beneath that degree for many of 2022. A transfer above would convey many traders into revenue, probably igniting a rally for the inventory.

If that occurs, nice. However I gained’t contemplate the inventory proper now because it’s nonetheless a bit dangerous.