Janney Montgomery Scott Upgrades SEI Investments (SEIC) to Buy

June 10, 2008 8:41 AM EDT

Janney Montgomery Scott upgrades SEI Investments (NASDAQ: SEIC) from Neutral to Buy on news SEIC has signed its second significant UK-based wealth management client, Towry Law.

Despite the upgrade, the firm expects earnings this year to remain under pressure because of weak equity markets, on-going investments in the new Global Wealth Platform, and declining contribution from minority-owned LSV. They maintain their FY 2008 EPS estimate of $1.34, versus $1.36/share consensus, and represent slightly negative growth relative to last year.

The firm said, "However, our call is not based upon short-term earnings trends, but on our view that earnings growth will begin to accelerate in the back-half of 2009 as new clients sign up for this innovative platform. We are raising our FY 2009 numbers slightly to reflect this view (from $1.55 to $1.58). Moreover, we believe the share price will discount any earnings acceleration well before the acceleration shows up in reported quarterly EPS numbers. As a result, our call may be early, but we believe 2009 will be an excellent new business year for the company. We recommend investors take a closer look at SEI in advance of what could be a significant turning point for the company."

SEI Investments Company provides investment processing, fund processing, and investment management business outsourcing solutions to corporations, financial institutions, financial advisors, and affluent families.

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