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On Tuesday, B.Riley analysts upgraded shares of Victory Capital Holdings, Inc. (NASDAQ: NASDAQ:VCTR) from Neutral to Buy, adjusting the price target upward to $70.00 from the previous $60.00. The revision reflects an optimistic outlook on the company’s earnings potential following the completion of the Amundi transaction. The upgrade aligns with Victory Capital’s strong financial health, evidenced by its perfect Piotroski Score of 9, as reported by InvestingPro.
Analysts at B.Riley cited the acquisition of Amundi’s assets as a significant factor for Victory Capital’s improved growth prospects. The deal is believed to add a high-quality growth franchise and scale, which is expected to drive stronger earnings per share (EPS) and net flow growth compared to its peers. The firm’s analysts have raised their 2026 estimated EPS from $6.85 to $7.00, taking into account the larger than initially projected assets under management (AUM) from the Amundi deal. The company’s current diluted EPS stands at $4.38, with revenue growing at 8.82% over the last twelve months.
Victory Capital’s performance has mirrored the downward trend of traditional asset managers year-to-date, with a -14.22% total return. Nevertheless, the successful closure of the Amundi transaction is seen as a transformative move for the company. B.Riley’s analysts argue that the enhanced growth profile justifies a price-to-earnings (P/E) ratio of 10x, aligning with the average of the peer group. Currently trading at a P/E of 12.52, InvestingPro analysis suggests the stock is undervalued, with additional metrics and insights available in the comprehensive Pro Research Report.
The new price target of $70.00 is based on this 10x multiple applied to the forecasted 2026 EPS of $7.00. Including the annual dividend yield of 3.37%, the target suggests a potential total return of 29%. B.Riley had previously adopted a more cautious stance on Victory Capital in January 2025, awaiting a more favorable entry point. The recent pullback in valuation, combined with the benefits expected from the Amundi acquisition, now positions Victory Capital favorably in the eyes of the firm’s analysts, even amidst ongoing market volatility due to tariff disruptions. With a current ratio of 2.1 and strong cash flow metrics, InvestingPro data reveals eight additional key insights about Victory Capital’s financial strength and growth potential.
In other recent news, Victory Capital Holdings, Inc. reported its latest financial figures, revealing a total of $176.5 billion in Assets Under Management (AUM) as of January 31, 2025. This marked an increase from $171.9 billion at the end of December 2024, reflecting growth across various asset classes. The company also announced a change in its independent registered public accounting firm, switching from Ernst & Young LLP to Deloitte & Touche LLP for the fiscal year ending December 31, 2025. This change was made to address auditor independence requirements related to a Contribution Agreement with Amundi Asset Management S.A.S.
Analyst firms have also been active in updating their outlooks for Victory Capital. Morgan Stanley (NYSE:MS) raised its price target for the company to $68.00, maintaining an Equalweight rating, following a slight increase in the company’s earnings per share (EPS) to $1.39. BMO Capital Markets increased its price target to $82.00, maintaining an Outperform rating, citing strategic and financial benefits from the upcoming acquisition of Amundi U.S. Barclays (LON:BARC) also raised its target to $75.00, noting Victory Capital’s adjusted EPS of $1.45, which surpassed expectations. The company continues to show commitment to shareholder returns with a 7% increase in its quarterly dividend and a new $200 million share repurchase program.
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