Fund Firms to Suffer Market Hangover

With considerable excess capital on the books, Snowling expects Franklin to continue buying back stock. He gives the company an outperform rating and a $105 price target from its current price near $85.

Merrill's view on Franklin is a bit more cautious, even though the brokerage maintains a "buy" rating on the firm. "Large investment income makes Franklin's EPS volatile," wrote Moszkowski, though he says he expects Franklin to meet Wall Street's estimates.

Snowling also believes that AllianceBernstein's net flow momentum is among the strongest of the group, and says this should help should lift its earnings. He also says the odds are good that that T. Rowe Price took advantage of the selloff to buy back stock, since it has no debt on the books.

JPMorgan's Ken Worthington gives T. Rowe Price an "overweight" rating.

"We believe [T. Rowe] is one of the best long term investments in asset management. Its strong long term performance track record, consistent sales, solid expense management and impeccable reputation for integrity has made it a core investment in the sector," Worthington wrote in a note, adding that the company has been a solid relative performer during periods of market disruption.

On the downside, Worthington warns that Janus is particularly exposed to the recent market downturn "since it has little flexibility to lower costs and its core growth franchise continues to experience net redemptions."

Besides Nuveen, one other big asset manager has already reported. BlackRock(BLK) last week said its second-quarter net income jumped to $63.4 million, or 95 cents a share, up from $53.3 million, or 80 cents a share, a year earlier. Excluding charges related to the company's pending purchase of Merrill Lynch's (MER) investment management business and other costs, adjusted earnings were $1.19 a share. Analysts expected earnings of $1.17 a share, before items. Assets under management totaled $464.07 billion at June 30, up from $414.41 billion a year earlier and $463.06 billion at March 31.

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