On Wednesday, Victory Capital Holdings, Inc. (NASDAQ:VCTR) received an optimistic outlook from BMO (TSX:BMO) Capital Markets, with the firm raising its price target on the shares to $55 from $53. The investment firm sustained its Outperform rating on the asset management company's stock.
The adjustment in the price target reflects a positive view on Victory Capital's recent acquisition of Amundi U.S., which is seen as a strategic fit for the company. The transaction is expected to contribute to Victory Capital's diversification of asset classes and client base, as well as enhance its distribution resources. BMO Capital Markets believes this move will support Victory Capital's potential for further capital returns and future acquisitions.
BMO Capital Markets commended Victory Capital for its proven track record in mergers and acquisitions (M&A) integration, highlighting the autonomy given to investment teams, focus on distribution, alignment of interests, and a centralized, though not standardized, operating platform. These factors are considered key strengths that underpin the company's successful M&A strategy.
According to BMO Capital Markets, the financial impact of the acquisition of Amundi U.S. is expected to be positive for Victory Capital. This development positions the company for sustained growth and reinforces its capability to execute additional acquisitions moving forward.
Victory Capital remains a top pick for BMO Capital Markets among asset manager stocks. The firm's endorsement reflects confidence in Victory Capital's business strategy and its ability to integrate acquisitions effectively while continuing to grow its operations and deliver value to shareholders.
InvestingPro Insights
In line with the positive sentiment from BMO Capital Markets, Victory Capital Holdings, Inc. (NASDAQ:VCTR) presents several compelling metrics and insights. With a market capitalization of $2.87 billion and a P/E ratio standing at 13.75, the company appears to be valued reasonably in the market. An adjusted P/E ratio for the last twelve months as of Q4 2023 further refines this valuation to 12.17. Victory Capital has also demonstrated a strong dividend policy, having raised its dividend for five consecutive years, with a notable dividend growth of 34.0% in the last twelve months and a current yield of 3.06%.
InvestingPro Tips highlight that the company has achieved high returns over the last year, with a one-year total price return of 52.2%, and is trading near its 52-week high, at 99.56% of the peak price. These returns are complemented by a robust three-month price total return of 30.01%. Additionally, Victory Capital maintains a solid financial foundation, with liquid assets surpassing short-term obligations, suggesting financial stability and the ability to meet its immediate liabilities.
For investors seeking more detailed analysis and additional insights, there are over 10 InvestingPro Tips available for Victory Capital on InvestingPro, which can be accessed at: https://www.investing.com/pro/VCTR. To enhance your investment research experience, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.