On Wednesday, TD Cowen shifted its stance on Janus Henderson Group (NYSE:JHG) stock, upgrading from Hold to Buy and increasing the price target to $37, up from the previous $34.
The move comes as the analyst anticipates a positive turn in the company's Mutual Fund performance fees, which could lead to earnings surpassing the consensus expectations.
The revised price target reflects a more optimistic view of Janus Henderson's earnings potential, with TD Cowen raising its adjusted earnings per share (EPS) estimates for 2024 and 2025 to $3.02 and $3.18 respectively, compared to the earlier projections of $3.00 and $2.95.
The analyst's decision is based on the analysis that Janus Henderson is nearing a pivotal change in its Mutual Fund performance fees.
The upgrade is also supported by the perception of improved relative flow dynamics within the company, as well as Janus Henderson's ongoing commitment to returning capital to shareholders.
The analyst noted that the current negative sentiment from sell-side could be an additional factor that might work in favor of the company as it transitions towards a more favorable earnings period.
Janus Henderson Group's potential to shift from negative to positive Mutual Fund performance fees is highlighted as a key factor that could remove a multi-year drag on earnings. This anticipated change is expected to result in a positive surprise to the market's consensus estimates.
The analyst's commentary underscores a positive outlook for Janus Henderson, driven by the company's financial dynamics and market position. With the upgraded rating and increased price target, Janus Henderson's stock is set to capture investor attention in the market.
InvestingPro Insights
The recent upgrade of Janus Henderson Group (NYSE:JHG) by TD Cowen to a Buy rating is echoed by several positive indicators in the company's financial metrics and market performance. According to InvestingPro data, Janus Henderson is trading at a P/E ratio of 12.66, suggesting a potentially undervalued stock relative to its near-term earnings growth. This aligns with an InvestingPro Tip highlighting the company's low P/E ratio in comparison to its earnings growth potential.
InvestingPro data also shows a robust dividend yield of 4.62% as of May 2023, indicating a commitment to returning capital to shareholders, which is consistent with the analyst’s observations. Moreover, the company's strong performance is reflected in its price total return over the last six months, showing a significant uptick of 34.14%, signaling investor confidence and market momentum.
Investors may find additional optimism in the fact that Janus Henderson has consistently raised its dividend for three consecutive years, an InvestingPro Tip that further demonstrates the company's financial health and management's confidence in its future cash flows. For those looking to delve deeper into Janus Henderson's financials and market outlook, InvestingPro offers a wealth of additional tips. Utilize coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro, where 6 more tips await to inform your investment decisions.
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