Affiliated Managers’ 2011 EPS Guidance Seems Low

Analysts at Citi maintain their “buy” rating on Affiliated Managers Group AMG. The target price for AMG is set to $100. AMG posted its Q2 EPS ahead of the estimates and the consensus primarily due to higher-than-anticipated performance fees. According to Citi, “2010 guidance cut from prior $5.90 to $6.65 range to $5.40 to $6.00, or $5.70 midpoint— owing to weak 2Q markets, stepped up global distribution investment spending and higher share count – as management “front ended” B/S de-leveraging without deals.” “Initial 2011 EPS guidance of $6.15 to $7.00 ($6.58 midpoint) seems low — And perhaps why stock up 6% post-earnings despite coming in modestly below $6.90 consensus. Range likely low on base business & performance fees and factors no deals, which seems incongruent with 2Q equities sales forward completion. Flow story should get progressively better, we believe as AMG increasingly well positioned for further investor re-risking,” the analysts say. More Analyst Ratings here.