Canaccord Genuity has hiked its price target on Aberdeen after inspecting the firm's £550 million acquisition of Scottish Widows Investment Partnership (Swip).
While outflows at Swip has caused concern some quarters, Canaccord analysts Arun Melmane and Robin Savage believe this is largely due to its former parent - state-controlled Lloyds - having to deal with more important issues.
'We attribute Swip’s recent outflows to a lack of focus within Lloyds as management has dealt with more pressing issues. The focus of Aberdeen’s management team on asset gathering is likely to prove beneficial to AUM growth,' the pair said in a note.
Ultimately Melmane and Savage believe the deal, which will see Lloyds take a 10% stake in Aberdeen, will be beneficial through the long-term relationship between the pair.
They also highlight the diversification benefits to Martin Gilbert's (pictured) firm.
Performance has been soggy in emerging markets of late given speculation around Fed tapering and the expected impact on asset pricing from the pull back of liquidity,' Melmane and Savage said.
'The diversification that Swip brings should mitigate some of the recent EM-related volatility the stock has seen (although Aberdeen remains an EM focused asset manager).'
Canaccord's stance opposes that of a number of other analysts, including investment banks Credit Suisse and HSBC and stockbroker Peel Hunt, who downgraded their buy ratings on Aberdeen to neutral before Christmas.
In its note, Credit Suisse voiced concern about how much revenue the Swip deal would bring in, while Peel Hunt believed the integration of the business would be a risk and said it preferred to see organic growth at the firm.
In weak day for markets the Canaccord note offered little support to Aberdeen's share price. At 2.15pm it had lost 15.3p, or 3.1%, to sit on 475.7p, around 25p shy of its 52-week high