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Waddell & Reed Financial Inc A WDR

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Morningstar’s Analysis

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Outflows Continued to Mar Waddell & Reed's Results in Q3; No Change to $13.50 per Share FVE

Greggory Warren, CFA Sector Strategist

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. 

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Company Profile

Business Description

Waddell & Reed is a midsize asset manager that had $67.9 billion in assets under management at the end of September 2020. The firm provides investment services for individual and institutional investors. Retail distribution, which accounts for 95% of managed assets, is handled through the company's own registered investment advisors (59% of AUM) and third-party broker/dealers and advisors (36%) in the wholesale channel. Equity-driven strategies account for an estimated 78% of total AUM, with fixed-income (20%) and money market (2%) offerings accounting for the remainder. The company has no discernible reach outside the United States.

6300 Lamar Avenue
Overland Park, KS, 66202
T +1 913 236-2000
Sector Financial Services
Industry Asset Management
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type High Yield
Employees 1,162