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Affiliated Managers (AMG) Down 1% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Affiliated Managers Group (AMG - Free Report) . Shares have lost about 1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Affiliated Managers due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Affiliated Managers Q1 Earnings Top, Revenues & AUM Down
Affiliated Managers’ first-quarter 2023 economic earnings of $4.18 per share surpassed the Zacks Consensus Estimate of 4.15. The bottom line, however, declined 4.1% from the prior-year number. Our estimate for economic earnings per share was $4.16.
Results were aided by lower expenses, partially offset by a decline in revenues and assets under management balance. Further, the company had a robust liquidity position.
Economic net income was $158.1 million, down 11.4% from the prior-year quarter. Our estimate for this metric was the same as the reported number.
Revenues & Expenses Decline, AUM Falls
Total revenues declined 14.8% year over year to $517.4 million. Also, the top line lagged the Zacks Consensus Estimate of $546.8 million. Our estimate for total revenues was $537 million.
Adjusted EBITDA was $216.8 million, down 9.7% from the year-ago quarter.
Total expenses decreased 3.7% to $380.5 million. Lower compensation and related expenses largely led to the fall. Our estimate for total expenses was $401 million.
As of Mar 31, 2023, total AUM was $668 billion, which declined 14%. Net client cash outflows in the quarter were $3.2 billion. Our estimate for AUM was $651.4 billion.
Capital & Liquidity Position Decent
As of Mar 31, 2023, Affiliated Managers had $832.8 million in cash and cash equivalents compared with $429.2 billion as of Dec 31, 2022. The company had $2.54 billion of debt, relatively stable from the prior quarter.
Shareholders’ equity as of Mar 31, 2023, was $3.27 billion compared with $3.23 billion as of Dec 31, 2022.
Second-Quarter 2023 Outlook
Management expects adjusted EBITDA to be in the $210-$220 million range based on the current AUM levels and including net performance fee earnings of $15-$25 million as well as the impact of the company's affiliate investment in Peppertree.
Interest expenses are expected to be $31 million, around the same level as the first quarter of 2023. Controlling interest depreciation is expected to remain at the first-quarter level of $2 million.
Net income (controlling interest) is expected to be between $108 million and $116 million. The company’s share of reported amortization and impairments is expected to be $29 million.
Intangible-related deferred taxes are projected to be $15 million. Other economic items, which now includes realized gains, are anticipated to be roughly $2 million.
Economic net income (controlling interest) is projected to be in the range of $154-161 million. Economic earnings per share is expected to be between $4.06 and $4.26.
The adjusted weighted average share count is estimated to be $37.9 million.
The GAAP tax rate is expected to be 26%. The cash tax rate is expected to be 17%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Affiliated Managers has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Affiliated Managers has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Affiliated Managers is part of the Zacks Financial - Investment Management industry. Over the past month, Ameriprise Financial Services (AMP - Free Report) , a stock from the same industry, has gained 5.2%. The company reported its results for the quarter ended March 2023 more than a month ago.
Ameriprise reported revenues of $3.7 billion in the last reported quarter, representing a year-over-year change of +2.9%. EPS of $7.25 for the same period compares with $5.98 a year ago.
Ameriprise is expected to post earnings of $7.52 per share for the current quarter, representing a year-over-year change of +29.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.8%.
Ameriprise has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Affiliated Managers (AMG) Down 1% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Affiliated Managers Group (AMG - Free Report) . Shares have lost about 1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Affiliated Managers due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Affiliated Managers Q1 Earnings Top, Revenues & AUM Down
Affiliated Managers’ first-quarter 2023 economic earnings of $4.18 per share surpassed the Zacks Consensus Estimate of 4.15. The bottom line, however, declined 4.1% from the prior-year number. Our estimate for economic earnings per share was $4.16.
Results were aided by lower expenses, partially offset by a decline in revenues and assets under management balance. Further, the company had a robust liquidity position.
Economic net income was $158.1 million, down 11.4% from the prior-year quarter. Our estimate for this metric was the same as the reported number.
Revenues & Expenses Decline, AUM Falls
Total revenues declined 14.8% year over year to $517.4 million. Also, the top line lagged the Zacks Consensus Estimate of $546.8 million. Our estimate for total revenues was $537 million.
Adjusted EBITDA was $216.8 million, down 9.7% from the year-ago quarter.
Total expenses decreased 3.7% to $380.5 million. Lower compensation and related expenses largely led to the fall. Our estimate for total expenses was $401 million.
As of Mar 31, 2023, total AUM was $668 billion, which declined 14%. Net client cash outflows in the quarter were $3.2 billion. Our estimate for AUM was $651.4 billion.
Capital & Liquidity Position Decent
As of Mar 31, 2023, Affiliated Managers had $832.8 million in cash and cash equivalents compared with $429.2 billion as of Dec 31, 2022. The company had $2.54 billion of debt, relatively stable from the prior quarter.
Shareholders’ equity as of Mar 31, 2023, was $3.27 billion compared with $3.23 billion as of Dec 31, 2022.
Second-Quarter 2023 Outlook
Management expects adjusted EBITDA to be in the $210-$220 million range based on the current AUM levels and including net performance fee earnings of $15-$25 million as well as the impact of the company's affiliate investment in Peppertree.
Interest expenses are expected to be $31 million, around the same level as the first quarter of 2023. Controlling interest depreciation is expected to remain at the first-quarter level of $2 million.
Net income (controlling interest) is expected to be between $108 million and $116 million. The company’s share of reported amortization and impairments is expected to be $29 million.
Intangible-related deferred taxes are projected to be $15 million. Other economic items, which now includes realized gains, are anticipated to be roughly $2 million.
Economic net income (controlling interest) is projected to be in the range of $154-161 million. Economic earnings per share is expected to be between $4.06 and $4.26.
The adjusted weighted average share count is estimated to be $37.9 million.
The GAAP tax rate is expected to be 26%. The cash tax rate is expected to be 17%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Affiliated Managers has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Affiliated Managers has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Affiliated Managers is part of the Zacks Financial - Investment Management industry. Over the past month, Ameriprise Financial Services (AMP - Free Report) , a stock from the same industry, has gained 5.2%. The company reported its results for the quarter ended March 2023 more than a month ago.
Ameriprise reported revenues of $3.7 billion in the last reported quarter, representing a year-over-year change of +2.9%. EPS of $7.25 for the same period compares with $5.98 a year ago.
Ameriprise is expected to post earnings of $7.52 per share for the current quarter, representing a year-over-year change of +29.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.8%.
Ameriprise has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.