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Barclays bullish on Victory Capital's USAA Asset acquisition

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Barclays bullish on Victory Capital's USAA Asset acquisition

Barclays analyst Jeremy Campbell reinstated Victory Capital Holdings Inc. at "overweight," saying the acquisition of USAA Asset Management Co. increased assets under management to $147.8 billion from $64.1 billion.

The deal also creates significant adjusted EPS accretion through the achievement of $120 million in run-rate synergies in the next 12 to 15 months together with combined adjusted EBITDA margins of 46%.

"Additionally, the ability to turbo down debt from Victory's strong free cash flow should coil the spring for another eventual acquisition as the company executes on its roll-up strategy," Campbell wrote.

The price target is $23. The EPS estimate is $2.69 for 2019 and $3.95 for 2020.