On Thursday, Evercore ISI adjusted its outlook on Artisan Partners (NYSE:APAM) Asset Management (NYSE:APAM), reducing the price target from $43.00 to $40.00, while maintaining an In Line rating. The adjustment follows observations of investor behavior and market trends impacting the asset management firm.
Artisan Partners' shares experienced a decline despite slightly better-than-expected inflows, primarily attributed to the retail channel. This movement is part of a broader pattern observed among asset managers on the day they report earnings. The company's margin now stands at 31%, with a slight decrease in the fee rate, which is expected to stabilize moving forward. Current models have been revised in light of April's market performance.
Looking ahead, the analyst anticipates that Artisan Partners will continue to face challenges that have been affecting the industry. These include a shift by non-US institutional clients, particularly in Australia, towards more passive investment strategies, ongoing institutional de-risking, reluctance to invest in emerging markets, a trend of capital moving into fixed income due to interest rate levels, and specific challenges faced by funds like MC and developing world in wealth management.
On a positive note, there are several factors that could support inflows into Artisan Partners. International value and high income strategies are still attracting investments, and the international explorer strategy boasts a three-year track record. Additionally, credit opportunities with a six-year record are generating alpha, and there is significant capacity available across nearly all teams.
The EMsights strategies are expected to maintain a pipeline until mid-2025, when they achieve a three-year track record. Institutional fundings in global unconstrained bonds and an increase in dialogues with both US and overseas institutional clients in fixed income and emerging market equities are also seen as favorable indicators.
Despite these positive aspects, the firm is projected to remain in outflow territory for some time. Projections for the second quarter show an estimated outflow of $0.8 billion, following a first-quarter outflow of $0.5 billion, which is more than the consensus estimate of a $0.65 billion outflow.
InvestingPro Insights
Artisan Partners Asset Management (NYSE:APAM) is currently navigating through fluctuating market conditions, and real-time data from InvestingPro offers additional insights. The firm has a market capitalization of $3.37 billion and is trading at a P/E ratio of 12.66. Notably, analysts have revised their earnings upwards for the upcoming period, reflecting a positive sentiment about the company's financial prospects. Moreover, the company has shown a strong performance over the last five years, with a price uptick of 36.33% in the last six months alone.
InvestingPro Tips suggest that Artisan Partners is trading at a low P/E ratio relative to near-term earnings growth, indicating potential for investors. Furthermore, the company not only pays a significant dividend to shareholders, but it also has a notable dividend yield of 7.25%, with a growth of 20% in the last twelve months as of Q1 2024. This could be particularly attractive to income-focused investors.
For those considering an investment in Artisan Partners, there are 10 additional InvestingPro Tips available that could provide further guidance. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering a comprehensive analysis and deeper insights into the company's financial health and performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.