Victory Capital Holdings, Inc. (NASDAQ: NASDAQ:VCTR) maintained its Outperform rating and a $59.00 price target from BMO (TSX:BMO) Capital. The firm's analyst highlighted several positive catalysts that could benefit the company’s stock in the coming 12 months.
These include the potential for improved net flows, the resumption of stock buybacks, promising merger and acquisition prospects, and a reduced private equity overhang.
The analyst expressed optimism about the company's future performance, suggesting that current earnings estimates might be on the conservative side. BMO's assessment is based on the potential for Victory Capital to realize revenue synergies following its collaboration with Amundi and to effectively deploy its excess capital.
Victory Capital's strategic moves are expected to serve as key drivers for the company's shares. The analyst from BMO Capital noted the asset manager's position as a top pick in the sector, underlining the favorable conditions that could lead to an uptick in the company's stock performance.
Victory Capital recently amended its credit agreement, extending the maturity date of its $100 million senior secured first lien revolving credit facility from July 1, 2024, to March 31, 2026, and reducing the interest rate margin by 0.50% per annum. This development, disclosed in a recent SEC filing, demonstrates Victory Capital's strategic approach to capital management.
The company has also been the subject of recent analyst upgrades. RBC (TSX:RY) Capital Markets and BMO Capital Markets have both raised their price targets for Victory Capital to $56.00 and $57.00 respectively, maintaining an "Outperform" rating. These upgrades were largely influenced by the company's potential transaction with Amundi US, which is expected to significantly expand Victory Capital's Assets Under Management (AUM) and deliver considerable expense synergies.
InvestingPro Insights
Victory Capital Holdings, Inc. (NASDAQ:VCTR) has demonstrated a robust financial performance, as reflected in the real-time data from InvestingPro. With a market capitalization of $3.07 billion and a P/E ratio of 12.96, the company shows a strong valuation profile. The adjusted P/E ratio for the last twelve months as of Q2 2024 stands at 11.85, which suggests that the company is trading at a reasonable price relative to its earnings.
InvestingPro Tips highlight that Victory Capital has not only raised its dividend for five consecutive years but also boasts a perfect Piotroski Score of 9, indicating high-quality financials. This aligns with the positive view expressed by BMO Capital's analyst, reinforcing the company's potential for continued financial health and shareholder returns. The company's significant return over the last week, with a 7.83% price total return, and its high return over the last year, at 52.09%, further underpin the analyst's optimism.
For investors seeking more insights, there are additional tips available on InvestingPro, providing a comprehensive analysis of Victory Capital's financial health and market performance. This includes the company's liquid assets surpassing short-term obligations, which is a strong indicator of financial stability. Victory Capital's strategic initiatives and financial metrics present a compelling case for investors, as highlighted in both the article and the additional insights from InvestingPro.
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