Zacks Investment Research Lowers Legg Mason (NYSE:LM) to Hold

Legg Mason (NYSE:LM) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research report issued to clients and investors on Monday, Zacks.com reports. They presently have a $38.00 price objective on the asset manager’s stock. Zacks Investment Research‘s price target would suggest a potential upside of 3.12% from the stock’s previous close.

According to Zacks, “Shares of Legg Mason have outperformed the industry over the past six months. Also, the company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters. First-quarter fiscal 2020 results reflect lower expenses, partially offset by fall in revenues. Legg Mason's strategic acquisitions are anticipated to boost top-line growth. Further, its focus on expanding product offerings bode well for the long term. Also, increasing revenues due to higher assets under management remain a tailwind. However, continued equity AUM outflows may pose a threat to achieving steady overall net inflows. Elevated costs due to investment in restructuring activities and rising compensation costs might deter bottom line growth. Also, unsustainable capital deployment activities keep us apprehensive.”

LM has been the topic of a number of other reports. Credit Suisse Group raised their target price on shares of Legg Mason from $39.00 to $42.00 and gave the company a “neutral” rating in a research note on Tuesday, August 6th. ValuEngine downgraded shares of Legg Mason from a “hold” rating to a “sell” rating in a research note on Thursday, August 1st. Morgan Stanley set a $27.00 target price on shares of Legg Mason and gave the company a “sell” rating in a research note on Thursday, May 16th. Royal Bank of Canada raised their target price on shares of Legg Mason to $39.00 and gave the company an “in-line” rating in a research note on Tuesday, May 14th. Finally, Evercore ISI reaffirmed a “hold” rating and issued a $36.00 target price on shares of Legg Mason in a research note on Tuesday, August 13th. Three research analysts have rated the stock with a sell rating, six have given a hold rating and four have assigned a buy rating to the stock. The stock currently has an average rating of “Hold” and an average target price of $34.09.

Shares of LM stock traded up $0.32 during trading hours on Monday, reaching $36.85. The stock had a trading volume of 7,087 shares, compared to its average volume of 708,305. The stock’s fifty day simple moving average is $37.93 and its 200 day simple moving average is $33.74. The company has a current ratio of 2.01, a quick ratio of 1.41 and a debt-to-equity ratio of 0.61. Legg Mason has a 12 month low of $23.25 and a 12 month high of $38.94. The firm has a market capitalization of $3.20 billion, a PE ratio of 12.12, a PEG ratio of 0.68 and a beta of 1.49.

Legg Mason (NYSE:LM) last released its quarterly earnings data on Thursday, August 1st. The asset manager reported $0.75 EPS for the quarter, beating analysts’ consensus estimates of $0.72 by $0.03. Legg Mason had a negative net margin of 1.72% and a positive return on equity of 7.24%. The company had revenue of $705.36 million during the quarter, compared to analyst estimates of $708.70 million. During the same period last year, the business earned $0.75 earnings per share. Legg Mason’s revenue was down 5.7% compared to the same quarter last year. As a group, equities research analysts anticipate that Legg Mason will post 3.64 EPS for the current fiscal year.

Several hedge funds have recently bought and sold shares of the business. Dimensional Fund Advisors LP increased its stake in shares of Legg Mason by 0.5% in the fourth quarter. Dimensional Fund Advisors LP now owns 4,075,993 shares of the asset manager’s stock worth $103,979,000 after acquiring an additional 18,559 shares during the last quarter. Geode Capital Management LLC increased its stake in shares of Legg Mason by 4.0% in the fourth quarter. Geode Capital Management LLC now owns 844,812 shares of the asset manager’s stock worth $21,551,000 after acquiring an additional 32,581 shares during the last quarter. Retirement Systems of Alabama increased its stake in shares of Legg Mason by 0.4% in the first quarter. Retirement Systems of Alabama now owns 111,353 shares of the asset manager’s stock worth $3,048,000 after acquiring an additional 461 shares during the last quarter. Clarkston Capital Partners LLC increased its stake in shares of Legg Mason by 3.5% in the first quarter. Clarkston Capital Partners LLC now owns 4,824,985 shares of the asset manager’s stock worth $132,060,000 after acquiring an additional 164,850 shares during the last quarter. Finally, West Coast Financial LLC increased its stake in shares of Legg Mason by 20.6% in the first quarter. West Coast Financial LLC now owns 130,051 shares of the asset manager’s stock worth $3,559,000 after acquiring an additional 22,188 shares during the last quarter. 81.80% of the stock is currently owned by hedge funds and other institutional investors.

About Legg Mason

Legg Mason, Inc is a publicly owned asset management holding company. Through its subsidiaries, the firm provides investment management and related services to company-sponsored mutual funds and other investment vehicles including pension funds, foundations, endowments, sovereign wealth funds, insurance companies, private banks, family offices, individuals, as well as to global, institutional, and retail clients.

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