On Thursday, Piper Sandler adjusted its outlook on shares of SEI Investments (NASDAQ:SEIC), reducing the stock's price target to $71 from the previous $72, while keeping a Neutral stance on the company's shares. This revision follows SEI Investments' recent quarterly financial disclosure, which included a minor core earnings shortfall against Piper Sandler's projections, excluding a one-off gain for the period.
SEI Investments maintained stable firmwide operating margins at 26%, with noted margin improvements within its private banks segment. Despite these positive aspects, the slight earnings miss prompted Piper Sandler to revise downwards its earnings per share (EPS) estimates for the years 2024 and 2025 to $4.19 and $4.42, respectively, from the prior estimates of $4.26 and $4.57.
The new price target is anchored on a 16 times multiple of the firm’s anticipated 2025 EPS, a decrease from the previous 17 times multiple used for the 2024 EPS. The rationale for the reduced multiple and consequent price target adjustment is attributed to a diminished certainty in the company's results looking one year further out.
The adjustment in SEI Investments' price target reflects the latest financial results and market conditions as interpreted by Piper Sandler. It is important to note that the market's response to such changes in analyst outlooks can vary, and investors often consider a range of factors when making investment decisions.
In other recent news, SEI Investments Company (NASDAQ:SEIC) demonstrated a strong performance in Q2 2024 with earnings per share (EPS) of $1.05 and revenue of $519 million. The company's focus on expanding its Registered Investment Advisor (RIA) segment, inorganic growth opportunities, and technological advancements, played a significant role in these positive financial outcomes. Despite a slight decrease in Q2 revenue for the RIA segment to $120.6 million, the company remains steady with 61 advisers.
SEI Investments also highlighted its focus areas, including sales pipeline, EPS growth, unit results, culture and talent, and RIA expansion. The company is actively addressing industry challenges and leveraging trends like intermediary consolidation and demand for private asset managers. Furthermore, investments in emerging growth areas, such as AI applications, are a priority for the company.
In terms of future expectations, SEI aims to be a premier destination for talent and recapture its influential position in the industry. The company is well-positioned to capitalize on market trends for technology, operations, and asset management services. These are recent developments that underscore SEI's commitment to growth and innovation in the financial industry.
InvestingPro Insights
Following the recent update from Piper Sandler, SEI Investments (NASDAQ:SEIC) continues to exhibit financial resilience and growth potential, as highlighted by key metrics from InvestingPro. SEI Investments boasts a solid P/E ratio of 17.99, reflecting investor confidence in its earnings capacity. The company's PEG ratio, which stands at a competitive 0.66, suggests that SEI Investments' stock may be undervalued relative to its earnings growth, providing an attractive entry point for potential investors.
InvestingPro Tips reveal that SEI Investments has a commendable track record of raising its dividend for 10 consecutive years and has maintained dividend payments for 37 consecutive years. These indicators of financial stability and shareholder commitment are further supported by the fact that the company's liquid assets exceed its short-term obligations. Moreover, with analysts revising their earnings upwards for the upcoming period, SEI Investments is poised for continued profitability, having been profitable over the last twelve months.
Investors looking to delve deeper into SEI Investments' performance and prospects can find a wealth of additional insights and tips on InvestingPro. For a more comprehensive analysis, consider using the exclusive coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. With 6 more InvestingPro Tips available, informed decision-making is just a click away.
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