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On Tuesday, Raymond (NSE:RYMD) James made an adjustment to SEI Investments ’ (NASDAQ:SEIC) financial outlook. Analyst Patrick O’Shaughnessy reduced the company’s price target from $99.00 to $94.00, while still maintaining an Outperform rating on the stock. According to InvestingPro data, SEI currently trades at an attractive PEG ratio of 0.62, suggesting the stock is undervalued relative to its growth prospects. The decision comes as a response to recent fluctuations in the market, which have influenced the firm’s projections.
The analyst noted that despite facing headwinds affecting asset-based revenues, SEI Investments’ performance in the fourth quarter of 2024 showcased significant improvements. The company demonstrated enhanced sales activity and better expense management, which are believed to be sustainable. These factors have contributed to an uptick in core revenue growth, with InvestingPro data showing impressive revenue growth of 10.7% and a robust return on equity of 27%. These factors, combined with the company’s strong financial health score, have contributed to more attractive incremental margins.
O’Shaughnessy expressed confidence in SEI Investments’ ability to adjust to market conditions, suggesting that the stock is poised for a positive revaluation. The company’s improved earnings per share (EPS) growth outlook was also mentioned as a factor that could offer investors an appealing risk/reward scenario.
SEI Investments’ fourth-quarter results from 2024 have been pivotal in reinforcing the analyst’s outlook. The company’s effective handling of sales and expenses during this period appears to have laid a foundation for future growth. This, coupled with the anticipated re-rating of the stock, has led to the maintenance of the Outperform rating despite the lowered price target.
Investors and market watchers are keeping an eye on SEI Investments as it continues to navigate the challenging market environment. The updated price target by Raymond James reflects a careful consideration of both the potential challenges and opportunities that lie ahead for the company. InvestingPro analysis reveals that SEI has maintained dividend payments for 37 consecutive years and has raised its dividend for 11 straight years, demonstrating strong financial stability. For deeper insights into SEI’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, SEI Investments Company reported a 31% year-over-year increase in earnings per share (EPS) for the fourth quarter of 2024, reaching $1.19, although slightly below the forecast of $1.21. Revenue for the same period surpassed expectations, totaling $557.2 million against the predicted $555.6 million. SEI also announced an expansion of its stock buyback program, increasing the authorization by $500 million, which brings the total available for repurchases to approximately $556 million. Additionally, SEI has agreed to sell its Family Office Services unit to Aquiline Capital Partners (WA:CPAP) for $120 million, a deal expected to conclude in the latter half of the second quarter of 2025. The company is also expanding its strategic partnerships, adding service providers Nifty, Jump, and TIFIN Wealth to enhance advisor efficiency. Analysts from firms such as Oppenheimer have noted the strong sales events and client retention strategies that SEI has implemented. These developments reflect SEI’s ongoing strategic initiatives and commitment to growth in the financial technology and asset management sectors.
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