The troubles afflicting FTSE 250 revenue inventory abrdn (LSE: ABDN) have been properly documented, they usually’re not over but.

The asset supervisor was fashioned in March 2017 through the £11bn merger between Normal Life and Aberdeen Asset Administration. As a substitute of driving worth, the ill-fated mash up destroyed it. Right now, the group’s price lower than £2.5bn.

Just about all the things that might have gone mistaken, did. All the things from dropping beneficial funding mandates to seeing flagship funds collapse and embarking on a ridiculed firm rebrand.

Can the share price get well in 2025?

Since launch, the abrdn share price has crashed from 385p to immediately’s 140.8p, a peak-to-trough lack of greater than 63%. And the slide simply received’t cease, with the shares down 23.67% over the past 12 months.

They appear low-cost although, buying and selling at 9.93 occasions earnings. The trailing yield is off the size at a whopping 10.43%.

This mixture of a excessive yield and low valuation is now routine throughout the monetary sector. It’s the identical sample at FTSE 100 financials Authorized & Basic Group, M&G and Phoenix Group Holdings.

Whereas none have bought off as laborious as abrdn, their shares aren’t precisely bombing alongside. Abrdn operates in a cyclical sector and it’s out of favour.

The one factor everybody agrees abrdn received proper was to snap up shopper funding platform Interactive Investor in March 2022.

Interactive Investor continues to bomb alongside, with abrdn’s 24 October replace displaying belongings beneath administration had jumped 13% year-to-date to £74.5bn. Buyer numbers grew 6% to 430,000.

Elsewhere, the information was characteristically grim, with internet outflows at its funding division totalling £4.5bn to date this 12 months. They have been concentrated in Asia and rising markets, which proceed to wrestle as a result of China’s hunch.

This FTSE 250 inventory is tough to like

By 29 November, abrdn was the UK’s most shorted inventory. Anyone shopping for it immediately is sticking their neck out.

The 16 analysts providing one-year share price forecasts have produced a median goal of 157.6p. If appropriate, that’s really a rise of 12.6%. Mixed with that yield, this may give buyers a complete 12-month return of greater than 22%. We’ll see.

Of these analysts, two price abrdn a Robust Purchase however they’re in a minority. 5 say Maintain whereas eight label it a Robust Promote.

But many will see that low valuation and excessive yield, and be tempted. Sooner or later, the monetary sector’s due a re-rating. That might occur if rates of interest fall markedly subsequent 12 months, injecting contemporary life into markets.

It should additionally make sky-high yields like this look much more engaging, because the returns from low-risk money and bonds fall. A worthwhile Chinese language stimulus bundle might elevate Asian markets and abrdn.

However is that revenue secure? As soon as yields hit double digits, they’re very shaky. abrdn has frozen its dividend at 14.6p for 4 years. Pre-pandemic it was 21.6p. This chart makes ugly studying.

Chart by TradingView

The dividend is now forecast to slide to only 0.9, which implies earnings could also be decrease than the price of funding shareholder payouts. It appears to be like extremely susceptible to me.

I maintain Authorized & Basic, M&G and Phoenix, so have sufficient publicity to the sector. Even when I didn’t, I wouldn’t begin with abrdn. The love must wait.