Wells Fargo Initiates Coverage (BLK, LM)

Wells Fargo initiates coverage on Black Rock BLK and Legg Mason LM. Wells Fargo writes, "We are initiating coverage of BLK with an Outperform rating on the shares. We are introducing 2010, 2011, and 2012 adjusted EPS estimates of $10.32, $11.60, and $13.35, respectively. BLK shares may earn a valuation of $196-206 over the next 12 months, based on a multiple of 19-20x our 2010 estimate (17-18x our 2011 estimate)." In regards to LM, Wells Fargo writes, "We are initiating coverage of LM with a Market Perform rating on the shares. We are introducing FY2011, FY2012, and FY2013 diluted EPS estimates of $1.50, $1.95, and $2.75, respectively. We have assigned a 12-month valuation range of $32-35 for LM shares, which is based on a 12-13x multiple on our CY2012 diluted EPS estimate of $2.68. We used CY2012E because this period captures the earnings power associated with the achievement of LM's previously announced streamlining efforts.