UPDATE: Citi Raising Price Target on Federated Investors

Citi Investment Research is out with a research report on Federated Investors, Inc (NYSE: FII) and is raising its price target to $15.50 from $15, but it has a Sell rating on shares.

In a note to clients, Citi Investment Research writes, "Our caution reflects ongoing money markets exposure, at risk 2012 consensus EPS expectations, and downside price risk to our target. At the margin, we examined key repurchase (repo) rates in light of “Operation Twist”, and though potentially encouraging around fee waiver impact, still seems negligible improvement before considering lingering regulatory-related “tail risk”. We also examined recent retail equity AUM dynamics, and while we expect FII to be among the select few putting up positive flows in 3Q versus peers, adverse mix shift is likely to blunt the overall EPS impact, in our view."

Shares of FII closed at $17.56 on Friday.