GARP Research Upgrades SEI Investments (SEIC) to Buy; Global Wealth Platform Finally Showing Signs of Sustainable Momentum
SEIC Hot Sheet
Rating Summary:2 Buy, 2 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
GARP Research upgraded SEI Investments (NASDAQ: SEIC) from Neutral to Buy with a price target of $26.50.
GARP analsyt, Seth Dadds, said, "After several years of setbacks, the highly anticipated Global Wealth Platform (GWP) is finally showing signs of sustainable momentum, in our view. We believe GWP’s sales and margin growth alone will drive over half the incremental operating profit we envision over the next three years, enabling SEI to increase profits at a faster clip than its asset manager peers. Based on our sum of parts analysis, we think the shares are worth $26.50 today. We believe the market is valuing SEI on its AUM only, and giving little or no credit to its Private Bank investment processing business (potentially its fastest grower) and its Investment Manager (IM) segment. Interestingly, just last week, TPG offered to buy rival GlobeOp at a multiple we think values SEI’s IM segment at $650m, or $~3.50/share. Moreover, SEI looks cheap on a P/E basis, and trades at under 10x our 2014 EPS estimate. This assumes AUM can grow at 5% annually, while assets under administration grow at 8% annually, with nearly half of this increase from GWP."
For an analyst ratings summary and ratings history on SEI Investments click here. For more ratings news on SEI Investments click here.
Shares of SEI Investments closed at $19.48 yesterday, with a 52 week range of $13.73-$24.82.
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GARP analsyt, Seth Dadds, said, "After several years of setbacks, the highly anticipated Global Wealth Platform (GWP) is finally showing signs of sustainable momentum, in our view. We believe GWP’s sales and margin growth alone will drive over half the incremental operating profit we envision over the next three years, enabling SEI to increase profits at a faster clip than its asset manager peers. Based on our sum of parts analysis, we think the shares are worth $26.50 today. We believe the market is valuing SEI on its AUM only, and giving little or no credit to its Private Bank investment processing business (potentially its fastest grower) and its Investment Manager (IM) segment. Interestingly, just last week, TPG offered to buy rival GlobeOp at a multiple we think values SEI’s IM segment at $650m, or $~3.50/share. Moreover, SEI looks cheap on a P/E basis, and trades at under 10x our 2014 EPS estimate. This assumes AUM can grow at 5% annually, while assets under administration grow at 8% annually, with nearly half of this increase from GWP."
For an analyst ratings summary and ratings history on SEI Investments click here. For more ratings news on SEI Investments click here.
Shares of SEI Investments closed at $19.48 yesterday, with a 52 week range of $13.73-$24.82.
Discover Wall Street's best ratings calls with the pros - Upgrade to Ratings Insider Elite. Free Trial!
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