Victory Capital minimize to Underweight at Piper on income strain from market vol, outflows

Victory Capital Holdings (NASDAQ:VCTR) inventory received dragged down by 2.4% in Wednesday afternoon buying and selling after Piper Sandler analyst Sumeet Mody downgraded shares of the asset supervisor to Underweight from Obese.

Mody laid down the first headwinds which have been hitting the normal asset administration area, together with market volatility and retail and fairness outflows, leading to downward strain in income and property below administration, he wrote in a notice.

“We additionally anticipate headwinds to price yields over the NTM from the retail and fairness outflows, and are ready till we see these outflows reverse course which we do not anticipate for some time,” the notice learn.

The Underweight score diverges from the Quant’s Maintain score and the typical Wall Avenue Analysts’ Purchase score.

Different asset managers, by comparability, are extra favored within the eyes of Mody regardless of a troublesome macroeconomic backdrop.

The current market turbulence “has paved the way in which for additional potential deployment exercise which was extra combined within the third quarter whereas monetization and fundraising exercise has additionally confirmed to be extra uneven and firm dependent,” he famous.

In the meantime, Mody forecasted the very best earnings development trajectories over the subsequent two years for Ares Administration (ARES) and Blue Owl Capital (OWL), as their comparatively robust fee-related earnings assist offset market vol.

Check out the Quant system’s screener of the best-rated shares throughout the asset administration ecosystem.