Barclays on U.S. Brokers, Asset Managers & Exchanges: Weekly Capital Markets Conditions Update
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Up: 8 | Down: 6 | New: 26
Rating Summary:
16 Buy, 23 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 6 | New: 26
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Barclays on U.S. Brokers, Asset Managers & Exchanges: Weekly Capital Markets Conditions Update
Barclays analyst, Roger A. Freeman, said, ""BROKERS: We believe that November was a mixed month vs. October as asset prices essentially round-tripped amidst still weak market volumes. Given conservative dealer positioning, we do not expect that the sharp rally over the past week has generated meaningful positive positioning P&L. We continue to believe that Goldman Sachs (NYSE: GS) & Morgan Stanley (NYSE: MS) are tracking somewhat below our 4Q11 trading revenue forecasts, though from a bottom-line perspective the market rally will benefit investment gains."
"TRADITIONAL ASSET MANAGERS: Our traditional asset managers under coverage increased 11.0% on average last week, vs. the S&P500's 7.4% rise. Within the group, we note T. Rowe Price (Nasdaq: TROW) outperformed peers with a 15.9% increase, and is now trading at a 5 point premium to the group's 2012 P/E average. While we consider shares as fairly valued, currently trading at our price target, we believe TROW deserves to trade at a premium to peers primarily owing to the consistency of its inflows over time."
"ALTERNATIVE ASSET MANAGERS: Alternative asset managers were up 15.1% on average last week, vs. the S&P500's 7.4% rise. Within the group, shares of Och-Ziff Capital (NYSE: OZM) lagged the broader market and the peer group with a 6.7% rise, which we attribute to flow and return concerns, as well as dilution from the company's recent secondary equity offering. We view OZM shares as attractively valued at 6x our 2012 EPS estimate of $1.40. Based on our revenue breakup methodology, we believe OZM's current share price level reflects its management fees stream and does not include potential incentive fees generation next year."
"EXCHANGES: On Friday, we broadly lowered our estimates for CBOE Holdings (Nasdaq: CBOE), CME Group (NYSE: CME) and IntercontinentalExchange (NYSE: ICE) after the companies reported November metrics. We believe the month of December could remain challenging for volumes given heightened volatility levels. In the week ahead, we expect to get volume releases from NYSE Euronext (NYSE: NYX) and NASDAQ (Nasdaq: NDAQ). We anticipate both will be in line with numbers we track on a daily basis, but anticipate consensus estimates could move lower as the Street uses the opportunity to true-up estimates to current QTD run rates."
Barclays analyst, Roger A. Freeman, said, ""BROKERS: We believe that November was a mixed month vs. October as asset prices essentially round-tripped amidst still weak market volumes. Given conservative dealer positioning, we do not expect that the sharp rally over the past week has generated meaningful positive positioning P&L. We continue to believe that Goldman Sachs (NYSE: GS) & Morgan Stanley (NYSE: MS) are tracking somewhat below our 4Q11 trading revenue forecasts, though from a bottom-line perspective the market rally will benefit investment gains."
"TRADITIONAL ASSET MANAGERS: Our traditional asset managers under coverage increased 11.0% on average last week, vs. the S&P500's 7.4% rise. Within the group, we note T. Rowe Price (Nasdaq: TROW) outperformed peers with a 15.9% increase, and is now trading at a 5 point premium to the group's 2012 P/E average. While we consider shares as fairly valued, currently trading at our price target, we believe TROW deserves to trade at a premium to peers primarily owing to the consistency of its inflows over time."
"ALTERNATIVE ASSET MANAGERS: Alternative asset managers were up 15.1% on average last week, vs. the S&P500's 7.4% rise. Within the group, shares of Och-Ziff Capital (NYSE: OZM) lagged the broader market and the peer group with a 6.7% rise, which we attribute to flow and return concerns, as well as dilution from the company's recent secondary equity offering. We view OZM shares as attractively valued at 6x our 2012 EPS estimate of $1.40. Based on our revenue breakup methodology, we believe OZM's current share price level reflects its management fees stream and does not include potential incentive fees generation next year."
"EXCHANGES: On Friday, we broadly lowered our estimates for CBOE Holdings (Nasdaq: CBOE), CME Group (NYSE: CME) and IntercontinentalExchange (NYSE: ICE) after the companies reported November metrics. We believe the month of December could remain challenging for volumes given heightened volatility levels. In the week ahead, we expect to get volume releases from NYSE Euronext (NYSE: NYX) and NASDAQ (Nasdaq: NDAQ). We anticipate both will be in line with numbers we track on a daily basis, but anticipate consensus estimates could move lower as the Street uses the opportunity to true-up estimates to current QTD run rates."
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