On Tuesday, TD Cowen revised its outlook for Affiliated Managers Group (NYSE:AMG), reducing the stock's price target to $198 from the previous $218 while continuing to recommend a Buy rating for the shares. The adjustment follows a cautious stance on equities after the first quarter of 2024, as expressed by the firm on Monday.
The firm's analyst provided insights into the rationale behind the new price target, noting a positive stance on alternative investments, mergers and acquisitions, fixed income, and capital deployment. However, the optimism was tempered by a less favorable view on equities following the first-quarter performance. The analyst found the increasing activity in the deal pipeline to be a positive sign.
To account for this outlook, TD Cowen has revised its earnings per share estimates for Affiliated Managers Group for the years 2024 and 2025. The revisions were made to reflect the weaker-than-expected guidance for the second quarter and changes to the revenue model, particularly regarding base fee rates.
Despite the reduction in the price target, TD Cowen stands by its Buy rating for AMG. The firm's analyst emphasized the decision to retain the Buy rating but noted the need to lower the 12-month sum-of-the-parts (SOTP) price target by $20 to $198, signaling continued confidence in the company's fundamentals while adjusting expectations to market conditions.
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