Morningstar

Morningstar, Inc.

Equity Bottom-Up

The transition to a new analyst as well as an acceleration in fund inflows in the first four months of 2019 combine with a rebound in equity markets to drive narrow-moat Magellan Financial Group’s fair value estimate increase to AUD 37.50 per share, from AUD 29.00. The firm’s proven ability to generate above-market returns, with relatively lower volatility and drawdowns than most competitors along with an effective distribution team has helped establish a strong reputation among investors. This…

Narrow-moat Magellan Financial Group announced an impressive set of half-year results, delivered against a backdrop of turbulent markets. Underlying net profit after tax, or NPAT, increased by 62% from the previous corresponding period, or pcp, to AUD 176.3 million driven by increased funds under management, or FUM. Within the six months, spot FUM increased to a high of nearly AUD 75 billion before dipping to AUD 70.8 billion by the end of December as higher volatility gripped global markets…

Narrow-moat-rated Magellan Financial Group's funds under management for November were slightly lower month on month but continued their upward trajectory after a period of sustained outperformance. Net inflows of AUD 522 million weren’t enough to prevent an AUD 870 million reduction in total FUM to AUD 72.1 billion as negative performance for the period had an impact. We remain confident in the asset manager’s ability to navigate increasingly challenging times and maintain our AUD 28 fair value…

Narrow-moat-rated Magellan Financial Group reported a strong fiscal 2018 result driven by increased funds under management, or FUM, and a subsequent 8% increase in net profit after tax, or NPAT, to AUD 212 million. The strong result prompted management to increase the 2018 dividend by 57% to AUD 1.35 per share, which was well above market expectations and to raise the payout ratio. All this during what has been a busy, and not always smooth year for the fund manager. A year which included a…

Narrow-moat-rated Magellan Financial Group heads into the close of fiscal 2018 with assets under management, or AUM, of about AUD 67 billion--approximately 30% higher than year-end fiscal 2017. We adjust our forecast AUM upwards to incorporate recent market performance and fund flow trends; however, our fair value estimate is unchanged at AUD 27. The stock is currently undervalued, trading approximately 16% below our valuation.
Analysts: John Likos and David Ellis

Australia

Magellan Financial Group Ltd operates as an investment management company. The Company invests in global equities and listed infrastructure. Magellan Financial Group serves customers worldwide.

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