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Is Q1 Earnings Beat Less Likely for Affiliated Managers (AMG)?

Affiliated Managers Group Inc. AMG is scheduled to announce first-quarter 2022 results on May 2, before the opening bell. Its earnings and revenues in the quarter are expected to have increased from the year-ago reported figures.

In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate. Results benefited from an improvement in revenues and growth in assets under management (AUM) balance, partly offset by higher expenses.

The company boasts an impressive earnings surprise history. Its earnings surpassed the consensus estimate in each of the trailing four quarters, the average beat being 3.2%.

Affiliated Managers Group, Inc. Price and EPS Surprise

Affiliated Managers Group, Inc. price-eps-surprise | Affiliated Managers Group, Inc. Quote

Earnings & Revenue Projections for Q1

The Zacks Consensus Estimate for first-quarter earnings is pegged at $4.32, which has been unchanged over the past seven days. The figure indicates a rise of 1% from the year-ago quarter’s reported figure.

The consensus estimate for sales is pegged at $656.4 million, indicating 17.4% year-over-year growth.

Key Developments in Q1

In January, Affiliated Managers and Leda Braga (Founder and CEO of Systematica Investments) acquired the remaining minority equity stake in Systematica. The equity interest was previously owned by a third-party investor.

Following the transaction, Braga holds a majority ownership position, while Affiliated Managers holds a small minority interest in the firm. Affiliated Managers expects the additional investment to add $18 million in incremental adjusted EBITDA this year, including estimated performance fees.

In March, Affiliated Managers announced an agreement to sell its minority interest in Baring Private Equity Asia (“BPEA”) to EQT AB, following the announcement of a combination of the companies. AMG expects the investment to contribute around $35 million to EBITDA in the ongoing year.

Management Expectations for Q1

Adjusted EBITDA is expected to be $235-$245 million. The guidance suggests performance fees of up to $10 million, and the full impact of the investments in Abacus and Systematic.

Interest expenses are expected to be $29 million, in line with the prior quarter’s reported number. Controlling interest depreciation is expected to remain at the fourth-quarter 2021 level of $2 million.

The company’s share of reported amortization and impairments is expected to be $30 million, 65.9% lower than the fourth-quarter level of $88 million.

Intangible related deferred taxes are projected to be $15 million, significantly higher than the $1 million reported in the fourth quarter.

Other economic items (excluding any mark-to-market impact) are anticipated to be $1 million.

Earnings Whispers

According to our quantitative model, the chances of Affiliated Managers beating the Zacks Consensus Estimate this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Affiliated Managers is -0.12%.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks to Consider

A couple of stocks from the finance space worth a look are Associated Banc-Corp ASB and Tradeweb Markets Inc. TW.

The Zacks Consensus Estimate for ASB’s current-year earnings has been revised upward by 7.6% over the past 30 days. The stock has gained 45.8% in the past two years. ASB currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Tradeweb Markets’ earnings estimates for the current year have been revised upward by 3.2% over the past 30 days. The stock has gained 44.3% over the past two years. TW currently carries a Zacks Rank #2.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Tradeweb Markets Inc. (TW) : Free Stock Analysis Report

Affiliated Managers Group, Inc. (AMG) : Free Stock Analysis Report

Associated BancCorp (ASB) : Free Stock Analysis Report

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