Piper Sandler has adjusted the price target for SEI Investments (NASDAQ: SEIC), increasing it to $77 from the previous target of $74, while maintaining a neutral stance on the stock.
The adjustment follows SEI Investments' recent quarterly financial results, which surpassed the firm's estimates after accounting for certain one-time gains.
SEI Investments experienced an uptick in firmwide operating margins, rising to 27% from 26%, and reported a record-breaking quarter for sales events, reaching $46 million.
The financial services firm's strong performance in the quarter presented little cause for concern, leading to expectations that SEIC shares would perform well in Thursday's trading.
In light of the quarterly outcomes, Piper Sandler has revised its earnings per share (EPS) projections for the years 2024 and 2025 upward, setting them at $4.31 and $4.65, respectively, from the prior estimates of $4.28 and $4.64.
The rationale behind the new price target involves applying an approximately 17 times multiple to the 2025 EPS estimate, a slight increase from the earlier 16 times multiple.
In other recent news, SEI Investments has been the subject of considerable focus following strong third-quarter earnings and revenue growth.
The company reported an earnings per share (EPS) of $1.19, surpassing both analyst expectations and consensus estimates.
This performance was largely attributed to higher-than-anticipated revenue in the Private Banking & Trust and Investment Advisors segments. Adjusting for one-time benefits, the core EPS for the company was estimated at $1.11.
SEI Investments' revenue from the Federal Deposit Insurance Corporation (FDIC) cash program is projected to double quarter over quarter in the fourth quarter due to enhancements that increased the cash sweep. Oppenheimer, following these developments, has raised its estimates and price target for SEI Investments, indicating confidence in the company's potential for continued financial growth.
In addition, SEI Investments announced a record-breaking third quarter, with significant top-line growth and effective expense management. The company's assets under management, administration, and advisement reached new highs, with net sales events totaling $46 million.
InvestingPro Insights
SEI Investments' strong quarterly performance, as highlighted in the article, is further supported by recent data from InvestingPro. The company's market capitalization stands at $9.18 billion, with a P/E ratio of 18.35, indicating a relatively reasonable valuation considering its growth prospects.
InvestingPro Tips reveal that SEI Investments has raised its dividend for 10 consecutive years, demonstrating a commitment to shareholder returns. This aligns with the company's strong financial position, as another tip notes that cash flows can sufficiently cover interest payments. These factors contribute to the positive outlook reflected in Piper Sandler's increased price target.
The company's revenue growth of 5.62% over the last twelve months and a robust gross profit margin of 78.38% underscore its operational efficiency. This efficiency is further emphasized by the operating income margin of 23.98%, which supports the article's mention of improved firmwide operating margins.
Investors considering SEI Investments might be interested to know that InvestingPro offers 8 additional tips for this stock, providing a more comprehensive analysis for those looking to delve deeper into the company's prospects.
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