J.P. Morgan Securities today raised its price targets on Invesco, Franklin Resources, Janus Capital Group, Pzena Investment Management and T. Rowe Price, citing growing strength in the equity markets.
Analyst Kenneth Worthington wrote in a research note that the S&P 500 is up 14.1% since July 1, with assets under management and revenue at money managers in general benefiting from the market impact.
“Fund flows are also remaining in positive territory, providing a tailwind to strong markets,” Mr. Worthington wrote.
Mr. Worthington was particularly bullish on Invesco and Franklin Resources given their exposure to international markets.
“With the dollar weak on continued rerisking and carry trades, we think the positive currency impact will drive outperformance of both stocks,” he wrote. “Furthermore we see fundamentals as strong for Invesco and Franklin, with each having improved sales and performance.”
However, he also wrote that many firms will see their margins suffer as compensation rises.
