Back to top

Image: Bigstock

Can Artisan Partners (APAM) Run Higher on Rising Earnings Estimates?

Read MoreHide Full Article

Artisan Partners Asset Management (APAM - Free Report) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this investment management firm, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Artisan Partners, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $0.59 per share, which is a change of -11.94% from the year-ago reported number.

The Zacks Consensus Estimate for Artisan Partners has increased 10.35% over the last 30 days, as two estimates have gone higher compared to no negative revisions.

Current-Year Estimate Revisions

For the full year, the earnings estimate of $2.59 per share represents a change of -3% from the year-ago number.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for Artisan Partners. Over the past month, two estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 10.2%.

Favorable Zacks Rank

Thanks to promising estimate revisions, Artisan Partners currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Investors have been betting on Artisan Partners because of its solid estimate revisions, as evident from the stock's 5.8% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Artisan Partners Asset Management Inc. (APAM) - free report >>

Published in