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Virtus Investment Trades At Discount To Peers; Credit Suisse Upgrades

Virtus Investment Partners Inc (NASDAQ: VRTS) reported last week its second-quarter earnings, which were strong enough to prompt analysts at Credit Suisse to upgrade the stock’s rating from Neutral to Outperform with a price target raised from $141 to $147.

Shares of Virtus were trading near the $113 per share mark last week, which corresponds to the same level when the company announced its RidgeWorth transaction in late 2016, Credit Suisse’s Ari Ghosh commented in his upgrade note. But since then Virtus managed to double its assets under management along with earnings power, and this isn’t accurately reflected in the stock.

In fact, over the past seven months, both Virtus’ fundamentals along with macro factors have improved, the analyst continued. As such, the company’s prospects heading into 2018 is bullish and includes positive net flows, large cash generation (a doubling of EBITDA versus 2016’s levels), solid margins and earnings per share growth.

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Finally, Virtus’ stock is trading at an “attractive” multiple that is actually trading at a two-turn discount (on consensus 2018 EPS estimates) to the overall peer group, the analyst concluded. As such, the analyst’s price target implies the potential for an attractive 32-percent total return including dividends which is superior to a 10-percent average for traditional asset managers.

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Latest Ratings for VRTS

Date Firm Action From To
Jul 2017 Credit Suisse Upgrades Neutral Outperform
Jul 2017 Morgan Stanley Maintains Equal-Weight
Jun 2017 Morgan Stanley Initiates Coverage On Equal-Weight

View More Analyst Ratings for VRTS

View the Latest Analyst Ratings

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