SEI Investments Earnings: Investment Managers Continues To Perform Well; Mixed Trends Elsewhere

SEI Investments reported an okay second quarter, in our view. Revenue of $489 million and EPS of $0.89 were optically above the FactSet consensus estimates of $479 million and $0.83, respectively. However, private banks segment revenue benefited from a $10.5-million early buyout fee and the institutional investors segment saw elevated expenses of $4.5 million. Excluding these items, revenue and EPS would have been in line with consensus, by our calculations. As we’ve seen in previous quarters, SEI’s investment managers segment continues to perform well and formed the bulk of the firm’s net new recurring sales, which we think were solid. However, the firm’s other segments continue to face challenges. Overall, we will maintain our narrow moat rating and fair value estimate of $69 on SEI’s shares.