Mixed Signals for SEI Investments: Strong Earnings Overshadowed by Potential Growth Slowdown

William Blair analyst Jeff Schmitt has reiterated their neutral stance on SEIC stock, giving a Hold rating on April 8.

Jeff Schmitt’s rating is based on a combination of factors that highlight both strengths and challenges for SEI Investments Company. The company reported a strong quarter with earnings per share exceeding expectations, driven by robust sales, disciplined expense management, and a strong performance in its IMS and Private Banks segments. Additionally, SEI benefited from expanding spread income and a high return of capital, which contributed significantly to its earnings growth over the past year.
However, Schmitt notes that the growth driven by spread income is likely to have reached its peak, especially as the Federal Reserve is expected to cut rates. Furthermore, other segments of the company are experiencing weaker growth, and there are concerns about market headwinds and economic uncertainties that could impact the company’s performance in the near term. These factors suggest a potential slowdown in earnings growth, leading Schmitt to project a decrease in EPS growth from 28% in 2024 to 8% in 2025. Consequently, these mixed signals underpin his Hold rating for the stock.

In another report released on April 8, Piper Sandler also maintained a Hold rating on the stock with a $74.00 price target.