Goldman Sachs Downgrades Waddell & Reed (WDR) to Neutral

Goldman Sachs downgraded Waddell & Reed (NYSE: WDR) from Buy to Neutral with a price target of $49.00.

Analyst Marc Irizarry said, "We lower WDR to Neutral on soft near-term performance at (WASAX) Asset Strategy and lingering outflows."

"Given the weakness in December, we believe investors will likely wait for better performance and flow trends before getting more bullish on WDR’s shares. Manager departures, HY weakness, and weak results in Asset Strategy were main drivers for underperformance in 2014, yet December’s results against a strong equity backdrop will likely delay any recovery in flows and upside to EPS. That said, most of these trends were known in 2014, and WDR is controlling expenses and increasing repurchases (we estimate a 3-4% reduction in shares in 2015); therefore, we believe that any rebound in organic growth could drive the shares higher, but near-term outlook remains weak," he added.

For an analyst ratings summary and ratings history on Waddell & Reed click here. For more ratings news on Waddell & Reed click here.

Shares of Waddell & Reed closed at $44.54 yesterday.

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