The share price of the UK-based St. James’s Place PLC (GB:STJ) fell today as it continued to face regulatory pressures on its fee structure. The company came under the radar of the regulators due to hefty charges for its services and few penalties. After the introduction of consumer duty in early 2023, the company was accused of unfair charges and a complex fee structure. To keep up with the regulations protecting customers, the company opted to reduce its fees, impacting its profitability.
The company stated that it is committed to working within the framework of consumer duty. This includes a complete assessment of the company’s fees to transform it into a much simpler and more uniform process.
St. James’s Place is an investment management company that provides a wide range of services to its customers. It includes wealth management, retirement planning, financial planning, and advice.
Concerns Mount over the Share Price
The company’s stock is down by 19.5% today at the time of writing. It continued its downward journey of recent times and has touched its lowest level since 2020. Since July 2023, the stock has lost around 40% of its value after the company reduced its fees on a wide range of products in response to the regulatory changes.
Apart from the regulatory issues, the last two years have been challenging for the company due to a slowdown in client inflows and the underperformance of its major funds. This trend is observed across the industry, impacting all major players amid the difficult economic conditions in the UK.
Is St. James Place a Buy?
Analysts believe the current market capitalization of the company makes it undervalued, but it still has a long way to go to boost its profitability. Today, analyst Larissa Van Deventer from Barclays reiterated her Buy rating on the stock, predicting an upside of almost 100% in the share price.
On TipRanks, STJ stock has received a Moderate Buy rating based on five Buy and four Hold recommendations. The St. James share price target is 1,140.11p, which implies a huge upside potential of 67% from the current trading levels.
