Goldman Sachs Downgrades Calamos Asset Management (CLMS)

Goldman Sachs Group analysts Richard Ramsden, Brian Foran, Daniel Harris and Jessica Binder Graham downgraded shares of Calamos Asset Management Inc (Nasdaq: CLMS) to a Sell rating, down from the previous rating of Neutral.

They also lowered the price target of Calamos Asset Management Inc to $11 per share, down from the previous price target of $13.50.

The analysts said they expected recent market volatility, as well as Calamos Asset Management Inc's heavy retail equity exposure to pressure flows in the near-term.

The Goldman Sachs Group analysts wrote, "further, the recent slippage in the firm’s performance (most of CLMS equity fund assets slipped into the second quartile from the first as of April on a one-year basis versus the end of 2009) could put incremental pressures on organic growth against the already-difficult backdrop for equity flows into 2H2010. Roughly 75pct of CMLMS’s AUM is retail with over 80pct equity. We lower our 2010/2011/2012 EPS estimates to $0.74/$0.87/$1.03 from $0.94/$1.07/$1.21 on lower expected flows and margin pressure. Our 12-month P/E based price target goes to $11 from $13.50. Key risks: better than expected cost controls, reacceleration of inflows."

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