Download PDF

1. Company Snapshot

1.a. Company Description

Rathbones Group Plc, through its subsidiaries, provides individual investment and wealth management services for private clients, charities, trustees, and professional partners in the United Kingdom and Jersey.The company operates in two segments, Investment Management and Funds.Its services include discretionary investment management, unit trust management, financial planning and advisory, managed portfolio, and banking and loan services, as well as trust, tax, and legal advisory services.


The company was formerly known as Rathbone Brothers Plc and changed its name to Rathbones Group Plc in December 2021.Rathbones Group Plc was founded in 1742 and is headquartered in London, the United Kingdom.

Show Full description

1.b. Last Insights on RAT

Rathbones Group Plc's recent performance has been positively influenced by analyst revisions, with a fair value estimate increase from £21.11 to £21.30, indicating a fine-tuning of their view on the stock. Institutional owners hold 80% of the company, implying significant influence over its direction. The company's involvement in various financial services activities, including wealth management, has positioned it well within the sector. Additionally, its recent disclosures and market talks covering financial services have contributed to a cautiously optimistic outlook.

1.c. Company Highlights

2. Rathbones' 2025 Earnings: A Strong Performance

Rathbones reported a robust financial performance for 2025, with funds under management and administration increasing by 6% to GBP 115.6 billion. Operating income grew by 3.1%, and underlying profit before tax rose 4.6% to GBP 238.1 million. The underlying margin expanded to 25.8% for the year. Earnings per share (EPS) came in at 177.1p, significantly higher than the estimated 83.6p. The company's strong performance was driven by the successful integration of IW&I, which delivered GBP 76 million in annualized synergies, exceeding the target of GBP 60 million.

Publication Date: Mar -03

📋 Highlights
  • Market Capitalization Growth: Reached GBP 2.4 billion, a 5-year high, reflecting investor confidence in strategic progress and operational scalability.
  • Financial Performance: Funds under management/administration rose 6% to GBP 115.6 billion; underlying profit before tax grew 4.6% to GBP 238.1 million with a 25.8% margin.
  • Integration Synergies: Achieved GBP 76 million annualized synergies from IW&I integration, exceeding GBP 60 million target and ahead of schedule.
  • Capital Return: GBP 50 million share buyback completed, with an additional GBP 20 million announced, alongside a 6.5% dividend increase to 99p per share.
  • Margin Target: 30% operating margin expected by Q4 2026, supported by GBP 16 million in 2026 synergies and cost efficiencies, with stable 3% FUMA growth guidance.

Revenue Growth and Margin Expansion

The company's revenue growth was driven by a combination of organic growth and the benefits of the IW&I integration. The underlying margin expansion was a result of cost discipline and the realization of synergies from the integration. As Jon Sorrell, the new Group CEO, noted, "We've completed the largest integration in our industry's history, creating a platform ready to perform." The company's focus on cost discipline and synergy delivery is expected to continue, with a target of achieving a 30% margin by Q4 2026.

Valuation Metrics

Using the current price, Rathbones trades at a P/E Ratio of 17.68, P/B Ratio of 1.47, and Dividend Yield of 4.32%. These valuation metrics suggest that the market is pricing in a certain level of growth and profitability for the company. With a strong track record of delivering on its targets, Rathbones is well-positioned to continue its growth trajectory.

Outlook and Guidance

Rathbones provided guidance for 2026, expecting 3% FUMA growth, stable inflation, and interest rates in line with current expectations. The company also expects to incur integration costs related to IW&I up to 2027, mainly share-based awards expensed over vesting periods, totaling GBP 177 million. Analysts estimate next year's revenue growth at 4.3%, which is slightly higher than the company's guidance. With a strong foundation in place, Rathbones is well-positioned to deliver on its growth targets and continue to create value for its shareholders.

3. NewsRoom

Card image cap

Rathbones upgraded to 'buy' as new CEO sets out plan to become the UK's best wealth manager

Feb -27

Source: proactiveinvestors.com

Card image cap

Rathbones shares rise 5% as wealth manager reports surge in statutory profit

Feb -27

Source: proactiveinvestors.com

Card image cap

Stock market sectors that could be more vulnerable to AI disruption

Feb -18

Source:

Card image cap

Stock market sectors that could be more vulnerable to AI disruption

Feb -18

Source:

Card image cap

St. James’s Place Leads European Wealth Managers’ Tumble on AI Threat

Feb -11

Source:

Card image cap

St. James’s Place Leads European Wealth Managers’ Tumble on AI Threat

Feb -11

Source:

Card image cap

Wealth Stocks Drop Outside the U.S.

Feb -11

Source:

Card image cap

What Is Changing The Story Behind Rathbones Group (LSE:RAT) And Its Fair Value Target?

Feb -01

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.50%)

6. Segments

Investment Management

Expected Growth: 5.5%

Growing demand for bespoke portfolio management services, increasing wealth among high net worth individuals, and rising adoption of tailored investment solutions drive growth in Rathbones Group Plc's Investment Management segment.

Asset Management

Expected Growth: 5.5%

Growing demand for bespoke portfolio management and discretionary fund management services, driven by increasing wealth among high net worth individuals and charities, is expected to drive Rathbones Group Plc's Asset Management segment growth.

7. Detailed Products

Wealth Management

Rathbones Group Plc provides wealth management services to individuals, charities, and trusts, offering personalized investment management, financial planning, and wealth protection.

Unit Trusts

Rathbones Group Plc offers a range of unit trusts, providing investors with diversified investment portfolios and access to a broad range of asset classes.

Inheritance Tax Planning

Rathbones Group Plc provides inheritance tax planning services, helping clients to minimize their inheritance tax liability and ensure the smooth transfer of wealth to future generations.

Pensions and Retirement Planning

Rathbones Group Plc offers pensions and retirement planning services, helping clients to plan for a secure retirement and achieve their long-term financial goals.

Charity Investment Management

Rathbones Group Plc provides investment management services to charities, helping them to achieve their investment objectives and further their charitable goals.

Trustee Investment Services

Rathbones Group Plc offers trustee investment services, providing investment management and administrative support to trustees and executors.

8. Rathbones Group Plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Rathbone Group Plc operates in a highly competitive industry, and there are many substitutes available to clients. However, the company's strong brand reputation and diversified investment management services help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Rathbone Group Plc's clients are primarily high net worth individuals and institutional investors, who have limited bargaining power due to the company's strong brand reputation and customized investment solutions.

Bargaining Power Of Suppliers

Rathbone Group Plc has a diversified supply chain, and its suppliers have limited bargaining power due to the company's scale and negotiating power.

Threat Of New Entrants

The wealth management industry has high barriers to entry, including regulatory hurdles and the need for significant capital investment. This limits the threat of new entrants to Rathbone Group Plc.

Intensity Of Rivalry

The wealth management industry is highly competitive, with many established players competing for market share. Rathbone Group Plc faces intense competition from other wealth management companies, which can lead to pricing pressure and higher marketing expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 4.54%
Debt Cost 7.25%
Equity Weight 95.46%
Equity Cost 7.25%
WACC 7.25%
Leverage 4.75%

11. Quality Control: Rathbones Group Plc passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Rathbones

A-Score: 6.7/10

Value: 6.5

Growth: 4.4

Quality: 7.5

Yield: 7.5

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
Julius Bär

A-Score: 6.1/10

Value: 5.5

Growth: 6.4

Quality: 6.4

Yield: 7.5

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
Hargreaves Lansdown

A-Score: 5.1/10

Value: 3.2

Growth: 5.1

Quality: 9.4

Yield: 1.9

Momentum: 5.0

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
Alba

A-Score: 4.9/10

Value: 5.4

Growth: 1.6

Quality: 6.6

Yield: 1.9

Momentum: 10.0

Volatility: 3.7

1-Year Total Return ->

View Full Report
Stock-Card
Latour

A-Score: 4.7/10

Value: 1.3

Growth: 7.4

Quality: 6.4

Yield: 3.1

Momentum: 2.5

Volatility: 7.7

1-Year Total Return ->

View Full Report
Stock-Card
Burford Capital

A-Score: 3.7/10

Value: 4.1

Growth: 8.0

Quality: 5.6

Yield: 1.9

Momentum: 0.5

Volatility: 2.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

21.35$

Current Price

21.35$

Potential

-0.00%

Expected Cash-Flows