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On Tuesday, Piper Sandler adjusted its outlook for Virtus Investment Partners (NYSE:VRTS), reducing the price target to $258 from $274, while maintaining an Overweight rating on the company's shares.
The revision follows a detailed review of the asset manager's updated assets under management (AUM) and a market valuation as of January 14. The firm's analysis led to a recalibration of earnings projections and price expectations for Virtus Investment Partners.
The firm's analysts noted a decrease in the adjusted earnings per share (EPS) estimate for the fourth quarter of 2024, now set at $7.26, down from the previous $7.37 forecast.
The adjustment was attributed to the December AUM release and the mark to market through mid-January. Furthermore, the estimated earnings for the years 2025 and 2026 were also revised downward by approximately 6%, to $27.92 and $29.87 respectively, from the earlier projections of $29.79 and $31.85.
This revision in estimates is primarily due to the impact of the market-to-market (MTM) valuation and a reduced average AUM, which saw a significant institutional outflow of $3.3 billion in December.
The new price target of $258 is based on approximately 6 times the firm's estimated enterprise value to adjusted EBITDA for the year 2025, a multiple that remains unchanged from the previous valuation methodology.
Virtus Investment Partners is expected to release its earnings for the fourth quarter of 2024 before the market opens on January 31. The upcoming earnings report will provide further insight into the company's financial performance and may influence future assessments of its stock value.
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