FTSE 100
The Abrdn share price has struggled this week even after the company reported stronger-than-expected profits. Shares of the company, which was previously known as Standard Life Aberdeen, declined by almost 4% from its highest level this week.
Abrdn has underperformed in the past few months. The share price has risen by less than 1% this year and by just 24% in the past 12 months. The year-to-date performance has even lagged that of the FTSE 100 index, which has risen by more than 10%.
The Abrdn share price has even lagged other London money managers. The chart below shows that the company’s share price has underperformed that of other money managers like Schroders and Legal & General.
This week price action was mostly because of the company’s half-year earnings. The company said that its pre-tax profits rose by 77.2% to 163 million pounds in the first half of the year. Its fee-based revenue rose by 7% to 755 million pounds. Its pre-tax profit soared to 113 million pounds after it made a loss of 498 million pounds in the first half of 2020.
The stock has mostly lagged because of the company’s outflows. Clients withdrew about 5.6 billion pounds in the first six months. This was a better performance than the 24.8 billion pounds that they redeemed in the first half of last year amid the global pandemic. The firm also acquired Exo Investing, a fintech it hopes will help with its wealth management business.
In general, Abrdn has found it difficult to integrate Standard Life and Aberdeen business units. It has also faced significant competition from other money managers in the UK.
The daily chart shows that the Abrdn stock price has struggled substantially recently. However, it is still about13% higher than where it was in May this year. The stock is slightly above the 38.2% Fibonacci retracement level. It is also slightly below the lower line of the Andrews Pitchfork tool. The stock is being supported by the 25-day and 50-day moving averages. It has also formed an inverted head and shoulders pattern.
Therefore, there is a possibility that the Abrdn share price will keep rising as bulls target the 23.6% retracement level at more than 300p. On the flip side, a drop below 270p will invalidate the bearish view.