Jefferies Cuts Price Target on Waddell & Reed Financial (WDR); Reiterates Hold
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Jefferies maintained a Hold rating on Waddell & Reed Financial (NYSE: WDR), and cut the price target to $18.00 (from $19.00), following the company's 3Q earnings report. The company highlighted -$440M of known redemptions to come out in 4Q16 as well as a slowing in gross retail sales trends in October when compared to Sept and the avg for 3Q16. Management was straightforward in acknowledging the challenges they face given regulatory changes, industry headwinds and current performance challenges.
Analyst Daniel Fannon commented, "WDR reported results that were above expectations on an adjusted basis, but also highlighted the ongoing challenges the company faces to stabilize assets. While outflows declined by close to 50% q/q, outflows in the advisor channel are beginning to pick up and investment performance across the platform remains challenged. While the $0.46/qtr dividend is secure for now, it will likely be re-evaluated if there is a market correction."
Shares of Waddell & Reed closed at $16.92 yesterday.
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