Goldman Sachs Downgrades Janus Capital Group (JNS), Lowers Price Target

Goldman Sachs Group analysts Richard Ramsden, Brian Foran, Daniel Harris and Jessica Binder Graham downgraded shares of Janus Capital Group Inc (NYSE: JNS) to Sell, down from the previous rating of Neutral.

They also lowered the price target of Janus Capital Group Inc to $10 per share, down from the previous price target of $15.

The analysts said that they were suggesting underweighting firms with heavy retail exposure and that Janus Capital Group Inc was likely to underperform its peers.

The Goldman Sachs Group analysts wrote that they "...believe JNS shares are likely to relatively underperform the group, as 75%/95% of Janus’ assets are retail/equities, respectively. Overall AuM levels and fee revenues are under pressure amid the sharp market correction and uptick in outflows, while incremental reinvestment in the business (suggesting expense stickiness) will likely pressure near-term operating margins. As a result, we see risks to both Street’s estimates (we are about 20% below consensus) and the stock’s P/E multiple amid lingering INTECH outflows and accelerating retail equity redemptions. We lower our 2010/2011/2012 EPS estimates to $0.61/$0.68/$0.85 from $0.79/$0.97/$1.20."

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