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Analysts expect underperforming asset management stocks to rebound

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Analysts expect underperforming asset management stocks to rebound

Analysts have kept their price targets intact on several asset management stocks that have fallen over the past year, indicating they believe the market is undervaluing the companies.

Private equity firm Safeguard Scientifics Inc. was trading 45% below its one-year mean price target as of Aug. 31, giving it the largest "implied upside" of any investment company. The company's shares have underperformed over the past year, losing 15.6%, but two-thirds of analysts have maintained a "buy" rating on the stock.

Like Safeguard, shares of Affiliated Managers Group Inc. have also lost ground over the last year. Currently, 80% of covering analysts have a "buy" rating on the shares.

At the end of August, eight securities and investment company stocks were trading at least 25% below analysts' one-year mean price targets.

Meanwhile, investment bank Greenhill & Co. Inc. was one of only two companies in the group trading above analysts' one-year price targets as of Aug. 31. After an 89.9% return over the last year, Greenhill was trading 14.8% above its mean one-year price target, more than any other company in the analysis. None of the eight analysts covering the stock recommend a buy.

In a similar vein, Hamilton Lane Inc. shares have more than doubled over the past year and were trading 3.6% above their one-year target at the end of August.

In this analysis, S&P Global Market Intelligence examined U.S. securities and investment companies trading on major exchanges in relation to their mean one-year analyst price targets as of Aug. 31. Only stocks with three or more analyst price targets, and that were trading above $5 per share, were included in this analysis.

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