Artisan Partners Asset Management Inc. (NYSE:APAM) just released its latest second-quarter results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 5.7% to hit US$203m. Artisan Partners Asset Management also reported a statutory profit of US$0.72, which was an impressive 37% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Artisan Partners Asset Management's six analysts is for revenues of US$878.5m in 2020, which would reflect a reasonable 3.7% increase on its sales over the past 12 months. Statutory earnings per share are predicted to rise 2.1% to US$3.06. In the lead-up to this report, the analysts had been modelling revenues of US$872.1m and earnings per share (EPS) of US$3.01 in 2020. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$49.17. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Artisan Partners Asset Management analyst has a price target of US$61.00 per share, while the most pessimistic values it at US$43.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Artisan Partners Asset Management shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Artisan Partners Asset Management's past performance and to peers in the same industry. The analysts are definitely expecting Artisan Partners Asset Management's growth to accelerate, with the forecast 3.7% growth ranking favourably alongside historical growth of 1.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.9% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Artisan Partners Asset Management is expected to grow slower than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$49.17, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Artisan Partners Asset Management going out to 2022, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for Artisan Partners Asset Management (1 makes us a bit uncomfortable!) that we have uncovered.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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