Results: Artisan Partners Asset Management Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
It's been a good week for Artisan Partners Asset Management Inc. (NYSE:APAM) shareholders, because the company has just released its latest third-quarter results, and the shares gained 9.7% to US$36.58. Revenues were US$313m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.04 were also better than expected, beating analyst predictions by 13%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the twin analysts covering Artisan Partners Asset Management provided consensus estimates of US$1.22b revenue in 2027, which would reflect a perceptible 3.1% decline over the past 12 months. Statutory earnings per share are expected to decline 14% to US$3.44 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.24b and earnings per share (EPS) of US$4.03 in 2027. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.
Check out our latest analysis for Artisan Partners Asset Management
The consensus price target held steady at US$34.50, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Artisan Partners Asset Management's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.5% by the end of 2027. This indicates a significant reduction from annual growth of 1.9% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Artisan Partners Asset Management is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Artisan Partners Asset Management. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Artisan Partners Asset Management. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here.
And what about risks? Every company has them, and we've spotted 3 warning signs for Artisan Partners Asset Management (of which 1 is a bit unpleasant!) you should know about.
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