We apply a DCF analysis, utilising a 10% mid-term growth rate and a 4.0% terminal growth rate to derive our target price of 335p. This is equivalent to 19x our FY 2026 EPS estimate versus an average two-year forward PE of 30x since AJ Bell’s IPO in November 2018.

Higher volume and activity growth is the biggest upside risk, in our view, if markets remain strong and AJ Bell continues to take significant market share. Further, cash margins and volumes may hold up better than we expect, which would present another key upside risk.