Bank of America Securities analyst Craig Siegenthaler upgraded the rating on Affiliated Managers to a Buy today, setting a price target of $331.00.
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Craig Siegenthaler has given his Buy rating due to a combination of factors that highlight the potential for strong returns from Affiliated Managers Group (AMG). The upgrade from Neutral to Buy is primarily driven by an optimistic outlook on AMG’s net flows, particularly from their tax-aware and private markets affiliates, AQR and Pantheon. This positive trend has led to an increase in earnings per share (EPS) estimates and a price objective (PO) of $331, suggesting a 45-50% total return potential.
Furthermore, AMG’s strategic shift towards secular growth areas, such as private markets and liquid alternatives, has revitalized its organic growth, reminiscent of its strong performance in the early 2010s. The company’s robust acquisition pipeline and the increasing demand for AQR’s tax-aware strategies, supported by favorable channel checks, further bolster the growth outlook. Despite potential risks, such as the need for new investments and affiliate dispositions, the combination of organic growth, accretive mergers and acquisitions, and share repurchases supports a projected EPS growth of over 15%, making the current stock valuation appear attractive.
In another report released on August 28, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $263.00 price target.