Market Overview

Credit Suisse Downgrades Legg Mason, Says Its Thesis Parallels The Consensus

Share:
Credit Suisse Downgrades Legg Mason, Says Its Thesis Parallels The Consensus
Related LM
Earnings Scheduled For October 24, 2018
Fidelity Rolls Out Zero-Fee Index Funds

Legg Mason Inc (NYSE: LM) reported better-than-expected second-quarter earnings after the close Oct. 25. 

The Analyst

Credit Suisse's Craig Siegenthaler downgraded Legg Mason from Outperform to Neutral with a price target of $49.

The Thesis

The analyst has a 12-month price target of $49 for the stock, which implies a return of 15 to 20 percent. (See Siegenthaler's track record here.) 

The potential return is higher than a return on an investment in peer companies, but lower than the potential return on an investment in stocks that have Credit Suisse's Outperform rating — leading to Siegenthaler's downgrade.

"We also now think our current LM thesis is not significantly differentiated from the consensus," the analyst said. 

In case of a severe correction in the equity markets, Legg Mason could be required to slow or stop its buyback, which would help prevent the company from hitting its 3x debt covenant in the event of an earnings decline, according to Credit Suisse. 

Siegenthaler raised 2018 and 2019 EPS estimates from $2.79 and $3.38 to $2.91 and $3.90, respectively. 

The Price Action

Legg Mason has gained around 37 percent since Jan. 3, 2017. The stock was down 0.69 percent at $41.19 at the time of publication. 

Related Links:

Benzinga's Top Upgrades, Downgrades For January 3, 2018

E*TRADE To Black Rock: Here Are Barclays' New Favorite Financials 

Latest Ratings for LM

DateFirmActionFromTo
Nov 2018Deutsche BankMaintainsBuyBuy
Nov 2018Morgan StanleyMaintainsUnderweightUnderweight
Oct 2018Deutsche BankMaintainsBuyBuy

View More Analyst Ratings for LM
View the Latest Analyst Ratings

Posted-In: Craig Siegenthaler Credit SuisseAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (LM)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
LXFTKeyBancDowngrades0.0
CPAImperial CapitalDowngrades68.0
PRMWImperial CapitalInitiates Coverage On18.0
TGTKeyBancInitiates Coverage On110.0
QCOMMorgan StanleyUpgrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Najarian Brothers See Unusual Options Activity In XLE And Texas Instruments

The Reward Outweighs The Risk In Expedia, Analyst Says