Sector Wrap: Shares of asset managers rise ahead of 2Q earnings despite analyst EPS revisions

Sector Wrap: Asset managers up despite Street cuts

NEW YORK — Shares of asset managers rose with the broader market Tuesday despite concern from two Wall Street analysts ahead of the industry reporting second-quarter results.

Goldman Sachs analyst Marc Irizarry removed his “Sell” rating on Calamos Asset Management Inc., a Naperville, Ill. investment manager, upping it to “Neutral” based on the stock’s low price. He noted the company’s shares have fallen 12 percent since late May, when he cut the rating.

Calamos shares added 56 cents, or 5.9 percent, to close at $10.07.

The upgrade brought Calamos in line with his view of the group. Irizarry said he expects no organic growth, weak fund inflows and his earnings estimates fall below the Wall Street average.

Likewise, Credit Suisse analyst Craig Siegenthaler lowered earnings-per-share estimates for several asset managers, stating in a note to clients that he expects “underlying fundamentals to deteriorate” in the second quarter. Weak inflows will mean reduced assets under management, he said, and the market decline will weigh on results.

Siegenthaler cut his forecast for AllianceBernstein LP’s net income to 43 cents from 47 cents per share. Irizarry cut his estimate to 44 cents from 47 cents per share. Both fall below the average estimate of 46 cents from analysts polled by Thomson Reuters. Nevertheless, the broader rally helped boost AllianceBernstein shares 40 cents to close at $28.80.

Both analysts also trimmed their estimates for Franklin Resources and Eaton Vance. Franklin shares jumped $2.95, or 3.2 percent, to end at $94.60 and Eaton Vance closed up 78 cents, or 2.6 percent, at $30.60.

Investors were enthusiastic Tuesday about better-than-expected profits from aluminum maker Alcoa Inc. and railroad operator CSX Corp. The Dow Jones industrial average rose more than 145 points and the major indexes were up well over 1 percent.

Shares of fund manager Invesco Ltd. jumped $1.18, or 6.5 percent, to $19.43. Janus Capital Group Inc. added 37 cents, or 3.8 percent, to $10.24. And Blackrock Inc. rose $2.75, or nearly 2 percent, to finish at $156.90.