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Wall Street Analysts Long on Asset Managers in 2018

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Wall Street sees more upside

Asset managers (VFH) are garnering ratings with upside potential in 2018 backed by tax rate cuts, broad market performance, and new fund flows. Among major managers, BlackRock (BLK) garnered 12 “buys” or “strong buys” in January 2018 compared to 11 in November 2017. Three analysts gave it “hold” ratings.

Analysts gave BlackRock a price target of $614.92 on a next-12-month basis. This estimate reflects an implied upside of 9.2% against the year-to-date return of 9.6% in 2018. The upside potential reflects an expansion of iShares, as well as more funds from institutional and retail category across the funds.

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Industrywide ratings

Among other traditional asset managers, State Street Advisors (STT) received seven out of 20 “buys” or “strong buys” in January 2018. The remaining 13 recommendations were “holds.” 

BlackRock’s ratings have remained stable during the past quarter. The company is mostly deriving value from new flows toward its ETFs offerings and marginally higher active fund management.

Among the banks, Bank of New York Mellon (BK) has six “buys” or “strong buys.” Twelve analysts gave “hold” ratings, and two analysts have recommended an “underperform” rating. The company has a price target of $60.08, compared to the current price of $57.54.

For T. Rowe Price Group (TROW), four analysts recommended a “buy” or “strong buy” in January 2018, nine analysts called for “hold” ratings, and three issued an “underperform” rating. The analysts gave a price target that was in line with its existing stock prices.

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