Jefferies Comments on and Makes Changes to Its Asset Management Industry Universe

Jefferies has initiated coverage on shares of Blackrock (NYSE: BLK) with a Hold rating, Janus Capital (NYSE: JNS) with a Buy rating, and Waddell & Reed (NYSE: WDR) with a Buy rating is efforts to expand is coverage of the asset management industry.

The firm reports that as a whole, the industry is having to adjust to rising volatility in the market and secular trends are pushing assets away from traditional actively managed funds into passive and alternative products.

In the near-term, Jefferies notes that fund flow trends may likely continue to favor risk averse assets such as fixed income.

An analyst at Jefferies comments, "The recent pullback in the equity markets has likely not curtailed the budgets of most asset managers. As a result, we anticipate margin contraction in the short term if asset levels do not quickly recover. We believe most asset managers will not indiscriminately pull discretionary spending without a better understanding of the current market dynamics. However, if the markets do not recover or remain volatile through the end of the year, we expect spending in 2012 to materially slow as managers look to maintain and/or restore margins."

Jefferies has made a number of estimate and price target changes to the companies within its asset management universe. Here is a list of all of the companies currently within it and the changes that the firm has made to them recently.

• Affiliated Managers Group (NYSE: AMG) currently has a $99 price target, down from $126, and has EPS estimates of $6.69 and $7.34 for 2011 and 2012, down from $7.40 and $8.40 previously. Maintains Buy rating.
• Franklin Resources Inc. (NYSE: BEN) currently has a $128 price target, down from $135, and has EPS estimates
  of $8.90 and $9.10 for 2011 and 2012, down from $9.08 and $9.70
  previously. Maintains Hold rating.
• BlackRock Inc. (NYSE: BLK) currently has a $177 price target and has EPS estimates
  of $11.58 and $12.68 for 2011 and 2012. Initiated with a Hold rating.
• Eaton Vance (NYSE: EV) currently has a $26 price target and has EPS estimates
  of $1.88 and $2.02 for 2011 and 2012. Maintains Hold rating.
• Invesco (NYSE: IVZ) currently has a $22 price target, down from $29, and has EPS estimates
  of $1.66 and $1.82 for 2011 and 2012, down from $1.81 and $2.15
  previously. Maintains Buy rating.
• Janus Capital (NYSE: JNS) currently has a $8 price target and has EPS estimates
  of $0.76 and $0.59 for 2011 and 2012. Initiated with a Buy rating.
• Legg Mason (NYSE: LM) currently has a $34 price target, down from $38, and has EPS estimates
  of $1.65 and $1.92 for 2011 and 2012, down from $2.24 and $2.12
  previously. Maintains Buy rating.
• T. Rowe Price Group (Nasdaq: TROW) currently has a $58 price target, down from $73, and has EPS estimates
  of $2.91 and $3.20 for 2011 and 2012, down from $3.15 and $3.70
  previously. Maintains Buy rating.
• Waddell & Reed (NYSE: WDR) currently has a $34 price target and has EPS estimates
  of $2.12 and $2.34 for 2011 and 2012. Initiated with a Buy rating.

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