Earnings To Show Divergence Between Alts And Traditional Asset Managers

1Q EPS estimates for Alts could be higher due to stronger portfolio returns, while Traditionals could witness a drop in EPS due to lower average AUM balances, reports Morgan Stanley. Michael J. Cyprys and colleagues said in their April 4 research note on Asset Managers that they anticipate average PE appreciation for the Alts at +0.03% and RE appreciation of +1.8%.

MS enhances EPS estimates for Alts sharply

Cyprys and colleagues point out that since they last marked their models in early February, the sharp equity market rebound boosted estimates for the Alts, though Traditionals lag on lower average fund values. They anticipate substantial upside to Alts’ consensus estimates, while they expect 6% downside to consensus on Traditionals.

The Morgan Stanley analysts point out that...