On Thursday, TD Cowen maintained its Hold rating on shares of Artisan Partners Asset Management, listed on the NYSE as APAM, with a consistent price target of $39.00. This decision followed Artisan Partners’ post-market release of its September Assets Under Management (AUM) figures on Wednesday. The report depicted a mixed outlook, with AUM figures largely aligning with expectations, but revealed variability in underlying flow trends for both the month and the quarter.
TD Cowen’s analysis pointed out a positive shift in fixed income (FI) traction, which continues to grow. However, this progress is being eclipsed by a decline in equities, which constitute roughly 90% of the AUM as of September 30. This disparity between the segments creates a challenging scenario for the asset management firm.
The assessment by the firm indicates that, while there are certain positive aspects in Artisan Partners’ performance, the overall picture remains mixed with prevalent challenges. The attrition in equities is notably significant given its large share of the total AUM, leading to the expectation that Artisan Partners’ shares may experience slight underperformance in the market on Thursday.
In summary, TD Cowen’s reaffirmation of the Hold rating and the $39.00 price target reflects a cautious outlook for Artisan Partners. It is anticipated that the stock might not progress at the same pace as broader market gains in the near term, due to the mixed evaluation of its September AUM and the ongoing balance between fixed income gains and equity losses.
In other recent developments, Artisan Partners Asset Management Inc. reported an 11% year-over-year increase in assets under management (AUM), reaching $167.8 billion as of September 30, 2024. Despite a minor quarterly decline, the firm’s Q2 2024 financial results showed an improvement in revenue and adjusted net income per share.
Nonetheless, the recently disclosed AUM figures did not meet the expectations set by TD Cowen’s financial model, prompting the maintenance of a Hold rating and unchanged stock price target of $39.00.
Artisan Partners has been actively exploring expansion opportunities within alternative investments, bolstered by a strong balance sheet featuring $150 million in seed capital and an undrawn $100 million credit facility.
Despite net outflows in growth and value strategies, the firm remains optimistic about emerging market equities and debt strategies, expecting potential institutional allocations. However, TD Cowen has revised down the adjusted earnings per share estimates for 2024 and 2025, considering recent market activities and anticipated tighter margins.
Recent developments at Artisan Partners indicate that the firm’s diverse range of investment strategies caters to various client mandates, with the International Value Team managing the largest portion of AUM at $46.3 billion. Investors are advised to monitor Artisan Partners’ stock as it responds to these developments and their potential impact on the company’s financial health and investor sentiment.
According to InvestingPro’s insights, Artisan Partners Asset Management’s financial position may indicate undervaluation, characterized by a P/E ratio of 12.61. This aligns with an InvestingPro Tip that suggests APAM trades at a low P/E relative to near-term earnings growth, which could be relevant given the mixed AUM figures reported.
Investors may find reassurance in APAM’s robust dividend profile. With a current dividend yield of 7.45% and a 35.32% dividend growth rate over the past twelve months, the company continues to provide shareholder rewards despite market challenges.
An InvestingPro Tip notes that APAM has consistently maintained dividend payments for 12 years, highlighting its commitment to shareholder returns amid contrasting performance between its equity and fixed income segments. For those seeking deeper insights into APAM’s financial health and market position, InvestingPro provides additional tips that may offer valuable guidance for investment decisions.
