Wells Fargo Initiates Coverage (BLK, LM)

Wells Fargo initiates coverage on Black Rock (NYSE: BLK) and Legg Mason (NYSE: LM).

Wells Fargo writes, "We are initiating coverage of BLK with an Outperform rating on the shares. We are introducing 2010, 2011, and 2012 adjusted EPS estimates of $10.32, $11.60, and $13.35, respectively. BLK shares may earn a valuation of $196-206 over the next 12 months, based on a multiple of 19-20x our 2010 estimate (17-18x our 2011 estimate)."

In regards to LM, Wells Fargo writes, "We are initiating coverage of LM with a Market Perform rating on the shares. We are introducing FY2011, FY2012, and FY2013 diluted EPS estimates of $1.50, $1.95, and $2.75, respectively. We have assigned a 12-month valuation range of $32-35 for LM shares, which is based on a 12-13x multiple on our CY2012 diluted EPS estimate of $2.68. We used CY2012E because this period captures the earnings power associated with the achievement of LM's previously announced streamlining efforts.