© Reuters. Investment firms T. Rowe Price (TROW) and Invesco (IVZ) downgraded to BMO Capital
By Sam Boughedda
T. Rowe Price (NASDAQ:) and Invesco (NYSE:) were downgraded to Market Perform from Outperform by BMO Capital analyst James Fotheringham on Monday.
The analyst said the downgrades were inspired by in-depth industry analysis.
Speaking on T. Rowe, Fotheringham also lowered the company’s price target to $135 from $160, telling clients in a note that they see another downside to the consensus, following the recent depreciation. market, and the company’s valuation “now appears full on our lowered estimates.”
“Our upgrade (last year) was poorly timed,” the analyst acknowledged.
“Apart from the year-to-date market depreciation, we failed to anticipate headwinds to TROW’s net flows and fund performance, driven in part by growth rotation at the value. Acquisition of Hill Advisors.”
Regarding Invesco, the analyst provided a similar explanation, adding that they had lowered their estimates by as much as 17% and reduced their target price from $25 to $20.
“Absent significant market appreciation, we believe spending will remain rigid, which will put pressure on EPS growth. We are seeing much higher relative value among downgraded alternative asset managers (APO, KKR and CG are our top picks,” Fotheringham wrote.