Affiliated Managers Group: Undervalued Stock with Promising Growth and Attractive Returns

Analyst Craig Siegenthaler of Bank of America Securities maintained a Buy rating on Affiliated Managers, retaining the price target of $331.00.

Craig Siegenthaler has given his Buy rating due to a combination of factors that highlight Affiliated Managers Group’s promising growth prospects. One of the primary reasons is the company’s strong organic growth forecast of 4-5%, which is largely driven by its tax-aware and private markets affiliates. This growth, when combined with earnings per share and net flow accretive mergers and acquisitions, significant share repurchases, potential performance fee upside, and unique profit-share leverage at AQR, suggests that the current valuation of the stock is undervalued with a price-to-earnings multiple that is much lower than its peers.
Another key factor supporting the Buy rating is the attractive returns generated by AQR Flex, one of AMG’s affiliates. AQR Flex has been able to achieve higher tax alpha by effectively managing losses across its investment strategies, resulting in impressive pre-tax and after-tax returns. Additionally, AQR’s significant contribution to AMG’s EBITDA and its potential for operating margin expansion through its profit-share structure provide further upside to AMG’s earnings per share over time. These elements collectively contribute to a favorable outlook for AMG’s stock, justifying the Buy rating.

In another report released yesterday, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $259.00 price target.

Based on the recent corporate insider activity of 32 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AMG in relation to earlier this year.