Analyst Note| Greggory Warren, CFA |
There was little in no-moat Waddell & Reed's third-quarter results that would alter our long-term view of the firm. We are leaving our $13.50 per share fair value estimate in place. The company closed out the September quarter with $67.9 billion in assets under management, up 4.5% sequentially but down 1.3% on a year-over-year basis. Net outflows of $1.8 billion were reflective of an annualized organic growth rate of negative 11.1% (a slight improvement on results from the first half of the year). With annual organic AUM growth still likely to be in a negative mid- to high-single-digit range during 2020-24, Waddell & Reed will be heavily dependent on market gains to increase its AUM.