Citi Rates Legg Mason (LM) Medium Risk

Citi Investment Research & Analysis analysts William R Katz and Neil Stratton rated shares of Legg Mason Inc (NYSE: LM) a Medium Risk, with a target price of $41 per share.

The analysts said that Legg Mason's recent outflows were offset by the company's diversification in stocks, fixed income assets, and money markets.

The Citi Investment Research & Analysis analysts wrote, "We forecast AUM to decline 3% from $685 billion at 4/30 to $662 billion at 5/31. Our May forecast includes NAV depreciation and $3B in attrition: LT attrition of $1B (2% annualized loss rate) and money market attrition of $2B (17% annualized loss rate). Our $2 billion money market attrition forecast assumes ~1% monthly run-off. Overall, with ~75% in fixed income + money markets, AUM should hold up better than peers."

Shares of Legg Mason were up nearly 3% at $30.87 per share in afternoon trading.