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Analysts generally positive on Victory Capital

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Analysts generally positive on Victory Capital

A number of research analysts initiated coverage of Victory Capital Holdings Inc. with generally positive takes on its potential for organic and inorganic growth.

William Blair analyst Chris Shutler rated the company "outperform" with adjusted EPS estimates of $1.69 for 2018 and $1.73 for 2019.

Shutler noted the company's attractive integrated multiboutique business model and excellent investment performance. He expects the company to achieve organic growth of 1% in 2018 and 2% in 2019 and to make additional acquisitions in asset classes that are more resilient to passive and fee headwinds.

Barclays analyst Jeremy Campbell initiated coverage of Victory Capital with an "overweight" rating and a $16 price target.

The company's ability to successfully execute acquisitions and achieve strong investment performance could continue driving AUM growth, Campbell wrote. He noted that the company's core strategies have been attracting inflows even as active managers continue to face challenges due to the shift to passive from active management.

Campbell expects the company to record adjusted EPS of $1.58 for 2018 and $1.63 for 2019.

Sandler O'Neill analyst Andrew Disdier started coverage of Victory Capital with a "hold" rating and a $14.50 price target.

He wrote that organic AUM growth, as well as management fee and adjusted revenue improvements, could be tough to come by given that more than 70% of the company's AUM are parked in U.S. domestic equity strategies. However, he believes that the company could still boost growth through acquisitions.

Disdier anticipates adjusted EPS of $1.52 for 2018 and $1.59 for 2019 from the company.

Keefe Bruyette & Woods analyst Robert Lee gave a "market perform" rating to Victory Capital with a $15.25 price target.

Lee projects organic growth of about 1% yearly for Victory Capital. He also expects the company to achieve growth from new acquisitions, noting that cost savings opportunities are a substantial component of its acquisition strategy unlike many of its multiboutique peers.

Lee's adjusted EPS estimates for the company are $1.65 for 2018 and $1.80 for 2019.

Goldman Sachs analyst Alexander Blostein initiated coverage of Victory Capital with a "neutral" rating and a $14.50 price target.

He expects the company to achieve modestly positive organic growth, driven by inflow within exchange-traded funds and non U.S. products. M&A could also be a source of upside, he added.

He expects adjusted EPS of $1.68 for 2018 and $1.81 for 2019 from the company.