Bullish indicating open at $55-$60, IPO prices at $37
On Tuesday, Barclays initiated coverage on Victory Capital Holdings, Inc. (NASDAQ:VCTR), assigning the stock an Equal Weight rating and setting a price target of $58.00. The newly covered asset management firm, which went public in 2018, has been recognized for returning capital to shareholders through buybacks and dividends. It has also seen growth in its assets under management (AUM) through mergers and acquisitions.
The firm has maintained stable fee rates and high margins over time, despite experiencing net outflows for much of its recent history. Barclays highlighted Victory Capital's pending transaction with Amundi US, which is expected to significantly increase its earnings per share (EPS). The transaction is also projected to boost Victory Capital's AUM by more than 50% and potentially improve its organic flow profile.
Barclays' coverage comes as Victory Capital continues to demonstrate financial resilience and strategic growth in the asset management sector. The company's focus on integrated, multi-boutique asset management has been a cornerstone of its business model since its initial public offering.
The analyst from Barclays noted that the anticipated benefits from the deal with Amundi US could provide a positive shift in Victory Capital's operational dynamics. The increase in AUM and the expected accretion to EPS are seen as key factors behind the initiation of coverage with an Equal Weight rating.
Investors and market watchers now have a new benchmark for Victory Capital's stock performance with the set price target of $58.00. The company's efforts to grow and return value to shareholders, paired with strategic transactions, are central to its evaluation by Barclays.
In other recent news, Victory Capital Holdings has been the focus of significant developments. RBC Capital adjusted its price target for Victory Capital from $56.00 to $55.00, maintaining an Outperform rating.
This follows a review of the company's post-second quarter estimates and the pending acquisition of Amundi US. BMO Capital also maintained an Outperform rating for Victory Capital, with a price target of $59.00, citing potential catalysts such as improved net flows and promising merger prospects.
Victory Capital also extended the maturity date of its $100 million senior secured first lien revolving credit facility, a strategic move expected to provide increased financial flexibility. Analysts from RBC Capital and BMO Capital have increased their price targets for Victory Capital, largely influenced by the company's potential transaction with Amundi US. This anticipated deal is expected to significantly expand Victory Capital's Assets Under Management (AUM) and deliver considerable expense synergies.
Despite potential risks such as market volatility and execution risks associated with the Amundi US integration process, Victory Capital maintains a positive outlook.
InvestingPro Insights
Victory Capital Holdings, Inc. (NASDAQ:VCTR) has been making notable strides in the asset management industry, as reflected in the recent coverage by Barclays. To further understand Victory Capital's financial position and future prospects, let's consider some key insights from InvestingPro. The company boasts a perfect Piotroski Score of 9, indicating strong financial health. Additionally, Victory Capital has consistently rewarded its shareholders, raising its dividend for 5 consecutive years—a testament to its commitment to returning capital.
InvestingPro data reveals that Victory Capital has a market capitalization of $3.54 billion and a P/E ratio of 14.94, which adjusts to 13.67 when looking at the last twelve months as of Q2 2024. The company's revenue has grown by 4.5% over the same period, with a robust operating income margin of 45.78%. These figures, coupled with a dividend yield of 3.01% and a significant price total return of 69.7% over the past year, paint a picture of a company that is not only profitable but also effectively delivering shareholder value.
Investors considering Victory Capital should note that InvestingPro offers additional insights and tips, including 11 more InvestingPro Tips for VCTR, which can be found at https://www.investing.com/pro/VCTR. These tips could provide valuable guidance for those seeking a deeper understanding of the company's investment potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.