Virtus Investment Upgraded On 4 Points

Credit Suisse’s Ari Ghosh believes Virtus Investment Partners Inc VRTS is a compelling capital return story, while the company’s net flow outlook is also improving.

Ghosh upgraded the rating on the company from Neutral to Outperform, while raising the price target from $90 to $91.

Basis Of Outperform Thesis

The analyst explained that the upgrade in the rating was based on four key points:

1. "We expect total net flows to improve significantly over the next few quarters.
2. "We look for excess capital deployment to continue at elevated levels.
3. "Overall fund performance remains solid.
4. "Attractive valuation at current levels."

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Risks

However, Ghosh also cautioned that Virtus Investment’s Emerging Markets fund accounted for more than 20 percent of the retail fund channel AUM and further deterioration in flows could lead to negative impact on the total net flow and earnings.

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