Goldman Sachs Downgrades Cohen & Steers (CNS) to Sell, Cites Risk to Flows

September 12, 2012 7:13 AM EDT
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Price: $36.69 +1.21%

Rating Summary:
    2 Buy, 2 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 18 | Down: 19 | New: 11
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Goldman Sachs downgraded Cohen & Steers (NYSE: CNS) from Neutral to Sell with a price target of $26.50 (from $31.00), suggesting 21% downside.

The firm cited: "(1) Significant deterioration in the firm's asset-weighted three-year performance record plus increasing competition from lower fee passive competitors
like Vanguard and iShares are likely to drive market share erosion in the US REIT space; (2) CNS’s Japanese sub-advised business (most of the $19 bn total sub-advised AUM), should see further flow deterioration after dividend cuts in several of those funds in 3Q12; and (3) valuation does not reflect softening fundamentals and the stock trades at a premium multiple relative."

Goldman raised 2012 EPS estimate to $1.58 from $1.56 on better market performance in 3Q12TD but lower 2013/2014 EPS to $1.67/$1.88 from $1.72/$2.01 on more conservative flow outlook.

For an analyst ratings summary and ratings history on Cohen & Steers click here. For more ratings news on Cohen & Steers click here.

Shares of Cohen & Steers closed at $33.71 yesterday.

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