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ISI Group Analyzed 2Q14 Earnings, Increasing FY15 Estimates and PT

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In a report published Friday, ISI group analyst Glenn Schorr analyzed Legg Mason Inc. (NYSE: LM) fiscal 2Q14 earnings. The analyst increased FY15 estimates and Legg's PT.

Legg reported 3Q13 EPS of $0.70 versus ISI of $0.53 and consensus of $0.62. The quarter reported +40bps of adjusted margin improvements with a 400 bps positive operating leverage and $90 million in stock buybacks. Unfortunately, Legg had a 2.9 percent organic decay of -$3.7 billion in long-term outflows and a low quality GAAP EPS of under $0.54. Revenues were up 5 percent YoY versus peer average of 10 percent.

Schorr commented, "While the active P&L and balance sheet mgmt. is great (imagine if the other asset mgrs. were this active), we continue to be held back by the asset mix and wonder what environment we need to see for Legg to enjoy double digit growth (S&P's up 23% YTD, but fixed income markets are flattish so revenues were only up 5%...)."

ISI increased FY15 estimates from $2.80 to $2.88 and raised the PT to $38.

Legg Mason closed at $37.91 on Friday.

Latest Ratings for LM

DateFirmActionFromTo
Jul 2015CitigroupMaintainsBuy
Jul 2015BarclaysMaintainsEqual-weight
Jul 2015JefferiesMaintainsBuy

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