UPDATE 1-BofA cuts targets, Q1 EPS view for US asset managers

viernes 28 de marzo de 2008 08:39 CET
 

 (Adds details)
 March 28 (Reuters) - Banc of America lowered its price
targets and first-quarter earnings estimates for six U.S. asset
managers, including BlackRock Inc (BLK.N: Cotización) and T. Rowe Price
Group Inc (TROW.O: Cotización), citing declining equity markets.
 So far in the first quarter, equity markets are down across
the board with U.S. equity markets falling 9.5 percent,
developed international equity markets 13.7 percent and
emerging markets equities 16.0 percent, the brokerage said.
 European equity capital markets faced their worst first
quarter since 2005, with issuance in initial public offerings,
follow-ons and convertible bonds totaling just $21 billion,
down 65 percent from a year ago, according to Thomson data
released on Friday.
 BofA, which reduced its quarterly EPS estimates on the U.S.
asset managers by an average of 6 percent, cut its price target
on the shares of BlackRock to $228 from $230 and on T. Rowe to
$48 from $51.
 Equity-sensitive asset managers like Janus Capital Group
Inc (JNS.N: Cotización), Franklin Resources (BEN.N: Cotización) and T. Rowe are most
impacted in the group, BofA said and maintained a "neutral"
rating on the stocks.
 However, outlook for the group remains positive with
organic growth rates of two to three times the industry levels,
high margins and hints of consolidation warranting above-trend
valuations, BofA wrote.
 The brokerage said it continued to prefer companies such as
Federated Investors Inc (FII.N: Cotización), BlackRock and Legg Mason Inc
(LM.N: Cotización) which are more levered to money funds or long-term fixed
income products.
 BofA has "buy" ratings on BlackRock, Federated Investors
and Legg Mason.
 The following table lists the estimates and price target
changes made by the brokerage on the companies:
 Company Name        Price target  Q1 EPS view   2008 EPS view
Closing price                      New    Old    New    Old  
New    Old     on March 27
 BlackRock           $228   $230   $2.05  $2.26  $9.32  $9.40 
$202.52
 Franklin Resources  $116   $123   $1.73  $1.87  $7.46  $7.80 
$99.46
 Federated Investors $52    $53    $0.65  $0.66  $2.75  $2.77 
$39.05
 Janus Capital       $27    $30    $0.27  $0.30  $1.21  $1.34 
$23.23
 Legg Mason          $89    $91    $0.78  $0.80  $4.40  $4.42 
$55.92
 T. Rowe Price       $48    $51    $0.58  $0.62  $2.39  $2.63 
$50.26
 (Reporting by Ramya Dilip in Bangalore; Editing by Himani
Sarkar)