Janus Henderson Group's (JHG) organic growth is expected to gain momentum in the coming years against a tough industry backdrop, aided by its differentiated product portfolio and retail channel strength, UBS said.

"Early signs of business improvement have begun to manifest in [key performance indicators] such as an inflection in net flows, a stable management fee rate, and expanding operating margins," the investment firm said in a Monday note.

UBS upgraded the asset management service provider to buy from neutral and raised the price target to $50 from $45, saying premium is expected to emerge even as the stock currently trades in line with slower-growing peers.

After last year's "robust" fixed income flows, the firm said it expects inflows to gain further traction in 2025/2026, underpinned by the company's expanded product offerings and enhanced global distribution, with the "greater opportunity" seen from active equity exchange-traded funds.

Janus has rolled out active equity ETF products in the US and Europe, UBS said, adding that given equities is the company's core strength, "we expect to see a similar, if not faster, growth trajectory than their fixed income products over the coming years."

JHG shares were 2% higher in recent trading.

Price: 42.69, Change: +0.83, Percent Change: +1.98