Raymond James lifts SEI stock rating, sets $99 target

On Thursday, SEI Investments (NASDAQ:SEIC) received an upgrade in stock rating from Raymond (NSE:RYMD) James, moving from Market Perform to Outperform, with a new price target of $99.00. The upgrade comes after a period of perceived improvement in the company’s sales activity and expense discipline. The company, currently valued at approximately $10.7 billion, has demonstrated solid revenue growth of 8.5% over the last twelve months. According to InvestingPro data, three analysts have recently revised their earnings estimates upward for the upcoming period.

Patrick O’Shaughnessy, an analyst at Raymond James, noted the historical optimism regarding SEI’s potential for improved sales and better margins, particularly in the Private Banks segment. This optimism was reignited with the appointment of CEO Ryan Hicke in early 2022, who brought a renewed sense of urgency to the company. Despite initial results that did not meet expectations, SEI has recently shown what Raymond James believes to be real and sustainable improvements. The company’s strong financial foundation is evident in its impressive dividend history, having maintained payments for 37 consecutive years and raised dividends for 11 straight years, as highlighted by InvestingPro’s analysis.

According to O’Shaughnessy, these improvements have been evident in SEI’s core revenue growth and attractive incremental margins. The company’s refreshed leadership and enhanced sales activity, along with disciplined expense management, have contributed to the upgraded rating.

The analyst expressed confidence in the company’s direction, suggesting that the stock is poised to re-rate higher. Alongside an improving earnings per share (EPS) growth outlook, Raymond James sees SEI as offering an attractive risk/reward profile for investors.

SEI’s recent developments have been closely monitored by Raymond James, and the firm’s decision to upgrade the stock reflects a significant change in their assessment of the company’s financial health and market position. The new price target of $99.00 represents a vote of confidence in SEI’s ongoing business strategy and its potential for future growth.

In other recent news, SEI Investments Company disclosed mixed results for its fourth quarter of 2024. The company’s earnings slightly missed analyst estimates, while revenue exceeded projections. Specifically, SEI posted adjusted earnings per share of $1.19, falling just short of the consensus estimate of $1.21. On the other hand, revenue saw a 15% year-over-year growth to hit $557.19 million, surpassing analyst expectations of $555.63 million.

These recent developments also include a 15% year-over-year increase in SEI’s consolidated revenues and a 43% jump in operating income compared to the same quarter in 2023. The operating margins also saw expansion, moving to 26% from 21% in the previous year. Furthermore, the company’s assets under administration and management also saw growth, with the former rising 15% to $1.06 trillion and the latter growing 18% to $476.7 billion.

In additional news, the company repurchased 3.1 million shares of its common stock for $259.5 million during the fourth quarter at an average price of $83.43 per share.

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