Deutsche Bank Downgrades Affiliated Managers Group (AMG) to Hold
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Deutsche Bank downgraded Affiliated Managers Group (NYSE: AMG) from Buy to Hold with a price target of $132.00 (from $159.00).
Analyst Brian Bedell said, "We regard AMG as one of the most differentiated stories in asset mgmt given its affiliate investment business model that enables the following competitive advantages: 1) ability to select strong managers with saleable product & more quickly augment its business mix, 2) investment model provides strong incentives for affiliates to grow, & structure mitigates negative operating leverage for AMG in downturns, 3) plenty of capacity for future accretive investments given rising need for succession planning in fragmented industry, 4) compounding benefits of scale as AMG adds affiliates & gains distribution clout, & 5) solid growth position given high mix of alternatives, non-US distribution & equities. This said, organic growth has come under more pressure in recent quarters vs. past few years (though still reasonably good vs. the industry) and a more cautious organic growth outlook near-term (at least next 1-2 quarters) has emerged and is likely to restrain AMG’s valuation for some time."
Shares of Affiliated Managers Group closed at $132.86 yesterday.
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