Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
Vivek Kumar

Morgan Stanley analyst Michael J. Cyprys started coverage on shares of StepStone Group with “Overweight” rating and target price of $33 and said the global private markets investment firm is an attractive play on structural growth in private markets, with sticky fee revenue, access to fast-growing end markets and an ability to expand margins.

“We see industry-leading organic growth supported by secular tailwinds, with the opportunity for margin expansion. StepStone is a private markets investment firm that provides customized investment solutions, advisory, and data services for its clients. We view StepStone’s core competency as an allocator that connects large pools of institutional capital to an extensive network of private markets funds,” Cyprys added.

StepStone’s shares closed 3.17% lower at $26.21 on Monday; however, the stock is up about 6% since the investment firm’s shares started trading on the Nasdaq Global Select Market on Sept. 16.

Five analysts forecast the average price in 12 months at $29.00 with a high forecast of $33.00 and a low forecast of $26.00. The average price target represents a 10.64% increase from the last price of $26.21. From those five, two analysts rated “Buy”, thee rated “Hold” and none rated “Sell”, according to Tipranks.

Morgan Stanley gave a target price of $55 under a bull scenario and $14 under the worst-case scenario.

Other equity analysts also recently updated their stock outlook. Goldman Sachs Group initiated coverage on StepStone Group in a research report on Monday. They set a “neutral” rating and a $26 price objective for the company.  JPMorgan Chase & Co. started coverage on StepStone Group. They issued a “neutral” rating and a $29 price target for the company.

UBS Group began coverage on StepStone Group. They issued a “buy” rating and a $30 price target on the stock. At last, Barclays began coverage on shares of StepStone Group. They set an “equal weight” rating for the company.

“Compelling structural growth story in private markets… We see 19% client asset CAGR driving 23% EPS CAGR in FY21-24 that’s not priced in,” said Michael Cyprys, equity analyst at Morgan Stanley.

“Many avenues for growth to surprise to the upside and drive upward revisions to estimates, supported by STEP’s global footprint, broad-scale, deep industry relationships and customized solutions that can drive new products, new clients and increased wallet share among existing clients. High-quality earnings supported by a sticky customer base and skew to recurring management fees with limited mark to market risk, resulting in greater revenue consistency.”

Upside risks: 1) Successful fundraising of SMAs, larger successor commingled funds, and newer products/strategies. 2) Growth in new retail/HNW channel. 3) Monetization of tech capabilities – highlighted by Morgan Stanley.

Downside risks: 1) Deeper recession leads to weaker investment performance, delaying performance fee realization and slowing AUM growth. 2) Higher than expected costs. 3) Inability to influence minority-owned businesses. 4) Greater regulatory scrutiny of PE.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.