(Bloomberg) -- Fiera Capital Corp. shares have been on a surge this year, but a National Bank of Canada analyst argues that the stock has little left by way of upside.
Jaeme Gloyn downgraded the Montreal-based asset manager to underperform, saying his team was cautious on its growth outlook given its already stretched valuation. He also pointed to tepid growth in assets under management following heavy outflows in recent quarters.
“We understand that the recent management buy-in transaction signals internal confidence and alignment, and management has expressed confidence in the regional distribution strategy in development,” Gloyn said in a note on Sunday. “That said, these initiatives remain unproven.”
Gloyn added that he needs to see more evidence that management buy-in will have a positive impact on Fiera and that company initiatives can boost assets under management and net inflows before his team becomes more positive on the stock. Gloyn raised the price target by a dollar to C$8.
Fiera shares had climbed 47% so far this year to close Friday at C$8.97. The stock fell as much as 7% to C$8.33 by 9:35 am Toronto time.
Fiera’s senior management and some board members bought back all Fiera shares from Desjardins Financial Holdings Inc. valued at C$53 million in June. The repurchase plan was also meant to remedy Desjardins Financial’s selloff of its entire stake in the company, of which it held just over 20% before April.
Last week, Fiera Capital’s preliminary assets under management of C$158.9 billion fell short of analyst estimates after it slipped due to net outflows from the company.
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