Legg Mason (NYSE:LM) Rating Increased to Buy at Zacks Investment Research

Zacks Investment Research upgraded shares of Legg Mason (NYSE:LM) from a hold rating to a buy rating in a report published on Friday, Zacks.com reports. The brokerage currently has $35.00 price objective on the asset manager’s stock.

According to Zacks, “Shares of Legg Mason have outperformed the industry over the past six months. Also, the company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters. First-quarter fiscal 2020 results reflect lower expenses, partially offset by fall in revenues. Legg Mason's strategic acquisitions are anticipated to boost top-line growth. Further, its focus on expanding product offerings bode well for the long term. Also, increasing revenues due to higher assets under management remain a tailwind. However, continued equity AUM outflows may pose a threat to achieving steady overall net inflows. Elevated costs due to investment in restructuring activities and rising compensation costs might deter bottom line growth. Also, unsustainable capital deployment activities keep us apprehensive.”

LM has been the topic of a number of other research reports. Credit Suisse Group increased their price target on Legg Mason from $39.00 to $42.00 and gave the stock a neutral rating in a research report on Tuesday, August 6th. ValuEngine downgraded Legg Mason from a hold rating to a sell rating in a research report on Thursday, August 1st. Evercore ISI reissued a hold rating and set a $36.00 price target on shares of Legg Mason in a research report on Tuesday. Royal Bank of Canada upped their target price on Legg Mason to $39.00 and gave the stock an in-line rating in a research note on Tuesday, May 14th. Finally, Morgan Stanley set a $27.00 target price on Legg Mason and gave the stock a sell rating in a research note on Thursday, May 16th. Three equities research analysts have rated the stock with a sell rating, five have issued a hold rating and five have assigned a buy rating to the company. The stock presently has a consensus rating of Hold and a consensus price target of $33.82.

Shares of NYSE:LM opened at $36.53 on Friday. The company has a market capitalization of $3.08 billion, a P/E ratio of 12.02, a P/E/G ratio of 0.68 and a beta of 1.49. Legg Mason has a 1 year low of $23.25 and a 1 year high of $38.94. The company has a debt-to-equity ratio of 0.61, a current ratio of 2.01 and a quick ratio of 1.41. The business’s 50 day simple moving average is $37.93 and its 200 day simple moving average is $33.74.

Legg Mason (NYSE:LM) last issued its quarterly earnings results on Thursday, August 1st. The asset manager reported $0.75 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $0.72 by $0.03. The business had revenue of $705.36 million for the quarter, compared to the consensus estimate of $708.70 million. Legg Mason had a positive return on equity of 7.24% and a negative net margin of 1.72%. The firm’s quarterly revenue was down 5.7% compared to the same quarter last year. During the same quarter in the prior year, the business posted $0.75 earnings per share. On average, sell-side analysts anticipate that Legg Mason will post 3.64 EPS for the current fiscal year.

The firm also recently announced a quarterly dividend, which will be paid on Monday, October 28th. Shareholders of record on Thursday, October 10th will be paid a dividend of $0.40 per share. This represents a $1.60 annualized dividend and a yield of 4.38%. The ex-dividend date is Wednesday, October 9th. Legg Mason’s payout ratio is presently 52.63%.

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in LM. Amundi Pioneer Asset Management Inc. increased its holdings in Legg Mason by 751.2% in the second quarter. Amundi Pioneer Asset Management Inc. now owns 34,659 shares of the asset manager’s stock valued at $1,327,000 after purchasing an additional 30,587 shares during the period. United Services Automobile Association increased its holdings in Legg Mason by 1.8% in the second quarter. United Services Automobile Association now owns 23,243 shares of the asset manager’s stock valued at $890,000 after purchasing an additional 412 shares during the period. MidWestOne Financial Group Inc. acquired a new stake in Legg Mason in the second quarter valued at $203,000. Nuveen Asset Management LLC acquired a new stake in Legg Mason in the second quarter valued at $21,206,000. Finally, Price T Rowe Associates Inc. MD increased its holdings in Legg Mason by 31.0% in the second quarter. Price T Rowe Associates Inc. MD now owns 29,531 shares of the asset manager’s stock valued at $1,130,000 after purchasing an additional 6,993 shares during the period. Hedge funds and other institutional investors own 82.44% of the company’s stock.

About Legg Mason

Legg Mason, Inc is a publicly owned asset management holding company. Through its subsidiaries, the firm provides investment management and related services to company-sponsored mutual funds and other investment vehicles including pension funds, foundations, endowments, sovereign wealth funds, insurance companies, private banks, family offices, individuals, as well as to global, institutional, and retail clients.

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