Why Affiliated Managers Group (AMG) Stock Is Rising Today

NEW YORK (TheStreet) -- Affiliated Managers Group (AMG) shares are up 3.7% to $211.83 on Tuesday after analysts at Credit Suisse (CS) reiterated its "outperform" rating and $260 price target for the company's shares.

The outlook is in response to the investors meeting the firm hosted at the global asset managers' offices.

"Specifically, we look for 2-4 acquisition announcements over the next 12 months, while we also look for strong (5-8%) organic growth through 2016. We estimate AMG will generate the highest organic growth in our coverage - but also relatively higher quality flows driven by significant product/manager diversification which drives lower risk/variability in results," said analysts.

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TheStreet Ratings team rates AFFILIATED MANAGERS GRP INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate AFFILIATED MANAGERS GRP INC (AMG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 2.8%. Since the same quarter one year prior, revenues rose by 17.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, AFFILIATED MANAGERS GRP INC's return on equity exceeds that of both the industry average and the S&P 500.
  • AFFILIATED MANAGERS GRP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AFFILIATED MANAGERS GRP INC increased its bottom line by earning $6.49 versus $3.27 in the prior year. This year, the market expects an improvement in earnings ($11.88 versus $6.49).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 54.5% when compared to the same quarter one year prior, rising from $64.70 million to $100.00 million.
  • Net operating cash flow has increased to $328.20 million or 24.98% when compared to the same quarter last year. In addition, AFFILIATED MANAGERS GRP INC has also vastly surpassed the industry average cash flow growth rate of -89.49%.
  • You can view the full analysis from the report here: AMG Ratings Report

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