Affiliated Managers Group Inc. (NYSE: AMG) – Stock Analysis
1. Executive Summary
- Company Name: Affiliated Managers Group Inc.
- Ticker: AMG
- Sector: Financial Services / Asset Management
- Investment Recommendation: Hold – Solid profitability and financial stability, but uncertain growth prospects warrant a hold rating.
2. Company Overview
- Business Model: Operates through partnerships with independent investment management firms, offering a range of investment strategies.
- Industry Position: Mid-sized global asset manager leveraging partnerships with independent firms for diversification and competitiveness.
- Key Products/Services: Traditional equity and fixed income, alternatives, private equity strategies.
- Management: Jay C. Horgen (CEO), Dava E. Ritchea (CFO).
3. Financial Analysis
- Revenue Growth: FY2023 revenue: $2.33 billion, relatively stable YoY.
- Profitability: FY2023 net income: $1.15 billion; net margin: ~49%.
- EPS: FY2023 diluted EPS: $13.30.
- Balance Sheet: Total assets: $8.88 billion; total debt: $2.31 billion; debt ratio: ~26%.
- Cash Flow: FY2023 operating cash flow: $1.5 billion, up 6% YoY.
4. Stock Performance
- Current Price: $174.27 (as of May 5, 2025).
- 52-Week Range: $139.25 – $197.81.
- Market Cap: ~$5.01 billion.
- Beta: 1.09 → moderate volatility.
- Recent Trend: Stock performed in line with the market over the past year.
5. Valuation Analysis
- P/E Ratio: ~12.8x, below industry average.
- P/S Ratio: ~2.46x, reflects growth premium.
- P/B Ratio: ~1.54x, fairly valued relative to assets.
- DCF Analysis: Price reflects growth expectations; earnings improvement needed.
- Peer Comparison: Similar valuation and profitability vs. Franklin Resources, Invesco.
6. Industry & Market Analysis
- Industry Trends: Global asset management expanding with demand for alternatives amid low interest rates.
- Market Share: Expanding via partnerships with independent asset managers.
- Macroeconomic Factors: Sensitive to interest rates, global economic growth.
7. Risk Analysis
- Market Risk: Volatility in global financial markets affecting AUM.
- Financial Risk: FX fluctuations impacting earnings.
- Regulatory Risk: Rising compliance costs from tighter financial regulations.
- Geopolitical Risk: Political uncertainty impacting investment environments.
8. Growth Catalysts
- New Products/Services: Expansion in alternatives and private equity.
- Expansion Plans: Growing share in emerging markets and among institutional clients.
- M&A Activity: Strategic acquisitions to strengthen portfolio.
- Industry Trend: Rising demand for alternative and ESG investments.
9. Analyst Sentiment
- Consensus Rating: 2 Buy; 3 Hold (out of 5 analysts).
- Target Price: Average $192.40 → ~10% upside.
- Recent News: Some analysts lowered target price in April 2025 amid cautious outlook.
10. Conclusion
Affiliated Managers Group Inc. offers stable profitability and solid financials, but faces uncertain growth prospects.
✅ Growing demand for alternatives and ESG may support long-term opportunity.
👉 Investment Recommendation: Hold – Monitor for growth catalysts before upgrading stance.
11. Appendix
- Stock Chart: Low volatility over past year.
- Financial Summary: FY2023 revenue: $2.33B; net income: $1.15B.
- Ownership: ~80% institutional ownership.