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Apollo, Carlyle among asset managers with greatest upside potential

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Apollo, Carlyle among asset managers with greatest upside potential

Analysts expect shares in alternative asset manager Medley Management Inc. to grow by a mean of 45.6% over the next year, the highest implied upside of any company in an S&P Global Market Intelligence analysis of asset manager and broker/dealer stocks.

However, only one of three covering analysts has a buy rating on Medley, and the stock has lost 29.8% over the last year, including dividends.

Safeguard Scientifics Inc. and JMP Group LLC had the second- and third-highest implied upside at 35.3% and 33.4%, respectively, as of March 2. Both stocks have dropped over the last year as well.

On the other hand, Apollo Global Management LLC, and Carlyle Group LP shares have enjoyed 50%-plus gains over the last year, and analysts still think the companies have at least another 25% upside.

Greenhill & Co. Inc. was the most overvalued stock in the analysis, trading 14.7% above its mean one-year price target, even after losing almost 29% over the last year. The company lost 34 cents per share in the fourth quarter, worse than the 19-cent loss expected by analysts.

Virtu Financial Inc. took the No. 2 spot, trading 12% above mean one-year estimates as of March 2. The company's stock gained 56.8% last month, including a 32% gain on Feb. 8 after the company disclosed fourth-quarter earnings, beating analyst expectations.

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In this analysis, S&P Global Market Intelligence considered major exchange-traded U.S. asset management and broker/dealer stocks trading in relation to mean one-year analyst price targets as of March 2. Only stocks covered by at least three analysts and trading above $5 per share were included in this analysis.