Zacks Investment Research downgraded shares of Waddell & Reed (NYSE:WDR) from a strong-buy rating to a hold rating in a report issued on Friday morning.
According to Zacks, “Waddell & Reed's shares have underperformed the industry over the last three months. Yet, the company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Estimates have been stable lately ahead of the company's first-quarter 2018 earnings release. As the company is making efforts to improve efficiency and optimize its operations, expenses are likely to trend lower in the next few quarters, thereby supporting bottom-line growth. Further, its initiatives through Project E are likely to boost top-line growth in the long run. However, pressure on revenues, mainly because of lower sales volumes and a tough operating environment remains a major concern. Also, muted growth in assets under management (AUM) is likely to hamper its financials in the near term.”
A number of other brokerages have also weighed in on WDR. Royal Bank of Canada restated a sell rating and set a $20.00 price target on shares of Waddell & Reed in a research note on Wednesday, January 31st. Bank of America set a $20.00 price target on Waddell & Reed and gave the stock a sell rating in a research note on Tuesday, January 30th. Citigroup upgraded Waddell & Reed from a sell rating to a neutral rating and set a $24.00 price target on the stock in a research note on Wednesday, January 31st. Keefe, Bruyette & Woods restated a hold rating and set a $23.00 price target on shares of Waddell & Reed in a research note on Friday, December 22nd. Finally, Jefferies Group reaffirmed a hold rating and set a $23.00 target price on shares of Waddell & Reed in a report on Thursday, January 11th. Five equities research analysts have rated the stock with a sell rating, four have given a hold rating and one has given a buy rating to the company’s stock. The company has an average rating of Hold and a consensus target price of $21.50.
Shares of WDR stock opened at $19.93 on Friday. Waddell & Reed has a fifty-two week low of $16.32 and a fifty-two week high of $23.82. The stock has a market cap of $1,719.75, a PE ratio of 10.38 and a beta of 1.95. The company has a debt-to-equity ratio of 0.11, a quick ratio of 1.16 and a current ratio of 3.09.
Waddell & Reed (NYSE:WDR) last issued its quarterly earnings results on Tuesday, January 30th. The asset manager reported $0.48 earnings per share for the quarter, topping the Zacks’ consensus estimate of $0.45 by $0.03. Waddell & Reed had a return on equity of 16.63% and a net margin of 10.72%. The business had revenue of $294.48 million for the quarter, compared to analyst estimates of $286.55 million. During the same quarter in the previous year, the firm earned $0.43 earnings per share. The company’s revenue was up .5% on a year-over-year basis. sell-side analysts predict that Waddell & Reed will post 2.23 EPS for the current year.
The company also recently announced a quarterly dividend, which will be paid on Tuesday, May 1st. Investors of record on Tuesday, April 10th will be issued a dividend of $0.25 per share. This represents a $1.00 dividend on an annualized basis and a dividend yield of 5.02%. The ex-dividend date is Monday, April 9th. Waddell & Reed’s dividend payout ratio (DPR) is 52.08%.
In related news, Director Jerry W. Walton sold 5,792 shares of Waddell & Reed stock in a transaction dated Thursday, February 1st. The stock was sold at an average price of $22.95, for a total transaction of $132,926.40. Following the completion of the sale, the director now owns 81,332 shares of the company’s stock, valued at $1,866,569.40. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. Insiders own 3.40% of the company’s stock.
Several institutional investors have recently added to or reduced their stakes in WDR. Renaissance Technologies LLC lifted its holdings in shares of Waddell & Reed by 383.0% during the fourth quarter. Renaissance Technologies LLC now owns 822,500 shares of the asset manager’s stock worth $18,375,000 after purchasing an additional 652,200 shares during the period. Chicago Equity Partners LLC lifted its holdings in shares of Waddell & Reed by 4,864.9% during the fourth quarter. Chicago Equity Partners LLC now owns 506,918 shares of the asset manager’s stock worth $11,325,000 after purchasing an additional 496,708 shares during the period. Arrowstreet Capital Limited Partnership acquired a new stake in shares of Waddell & Reed during the fourth quarter worth about $7,059,000. Dimensional Fund Advisors LP lifted its holdings in shares of Waddell & Reed by 9.2% during the third quarter. Dimensional Fund Advisors LP now owns 2,945,385 shares of the asset manager’s stock worth $59,113,000 after purchasing an additional 249,118 shares during the period. Finally, TIAA CREF Investment Management LLC lifted its holdings in Waddell & Reed by 67.8% in the fourth quarter. TIAA CREF Investment Management LLC now owns 426,338 shares of the asset manager’s stock valued at $9,524,000 after acquiring an additional 172,332 shares during the period. 97.43% of the stock is owned by hedge funds and other institutional investors.
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About Waddell & Reed
Waddell & Reed Financial, Inc, through its subsidiaries, provides investment management and advisory, investment product underwriting and distribution, and shareholder services administration to mutual funds, and institutional and separately managed accounts in the United States. The company acts as an investment adviser for institutional and other private investors, and provides sub advisory services to other investment companies; and underwrites and distributes registered open-end mutual fund portfolios.
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