Barclays Maintains an 'Overweight' on Janus Capital (JNS); Fundamental Headwinds Persist

Barclays maintains an 'Overweight' on Janus Capital (NYSE: JNS) price target of $10.00.

Barclays analyst says, "In the 3Q, JNS continued to face fundamental headwinds due to on-going fund underperformance and outflows. That being said, a key highlight for the quarter was fund flows, which came in better than we had expected almost across the board. Notable standouts on the upside were growth/blend and fixed income (driven by a $1.3bn institutional win for the Balanced fund) and INTECH (slower redemptions). As JNS has been the 2nd-worst performer among the traditional asset managers we cover over the past 3 months (due to high exposure to weak equity markets, outflow concerns and performance-related incentive fee givebacks). However, macro concerns hanging over equity markets and caution with respect to future flows on the back of negative fund performance and negative performance fee risks are likely to hang over the shares until market conditions more favorable to JNS's investment styles reemerge, which we believe is not likely to happen at least until the European situation is resolved."

"JNS 3Q11 headline EPS of $0.15 missed our and the consensus estimate of $0.17, due entirely to higher-than-expected markdowns on its investment portfolio due to 3Q market declines. Our full-year EPS estimates are $0.74 in 2011 and $0.64 in 2012. As part of our outlook, we are also modeling negative performance fees of $50mn in 2012 (unchanged from prior)."

For more ratings news on Janus Capital click here and for the rating history of Janus Capital click here.

Shares of Janus Capital closed at $6.38 yesterday.

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