Affiliated Managers Group (AMG) Stock Upgraded to Buy with $255 Price Target: Analyst Expects Steady Organic Growth and Margin Expansion

TD Cowen has upgraded Affiliated Managers Group (AMG) from Hold to Buy, setting a new price target of $255. The firm anticipates AMG reaching a significant turning point that could lead to accelerated growth and improved profit margins, driving steady positive organic growth through 2026 and contributing to a modest increase in valuation multiples.

TD Cowen has upgraded Affiliated Managers Group (AMG) from Hold to Buy, setting a new price target of $255. The firm anticipates AMG reaching a significant turning point that could lead to accelerated growth and improved profit margins, driving steady positive organic growth through 2026 and contributing to a modest increase in valuation multiples.

The upgrade by TD Cowen comes as AMG continues to focus on high-growth areas such as private markets and liquid alternatives. According to the latest financial data, AMG reported a revenue of $2,030.5 million, with a one-year growth rate of 17%. The company's strong profitability metrics, including an operating margin of 28.29% and a net margin of 21.79%, highlight its ability to manage costs effectively while growing revenue.

TD Cowen's positive outlook is supported by AMG's strategic positioning within the asset management industry. With a market capitalization of approximately $5.89 billion, AMG operates a unique business model by acquiring majority interests in boutique investment management firms, allowing these affiliates to operate independently while AMG provides strategic, operational, and technological support. This model has enabled AMG to amass a diverse network of affiliates managing $712 billion in assets as of March 2025.

The company's financial health is further underscored by a balanced approach to leveraging, with a debt-to-equity ratio of 0.81 and a current ratio of 1.35, indicating adequate liquidity to cover short-term liabilities. However, the Altman Z-Score of 2.64 places AMG in the grey area, indicating some financial stress, and insider activity shows three insider sales over the past 12 months, totaling approximately $5.45 million.

Despite these factors, TD Cowen's upgrade reflects confidence in AMG's ability to navigate market conditions and drive future performance. The consensus target price is $234, with a recommendation score of 2, indicating a Buy rating. Technical indicators also suggest a positive trend, with the 20-day SMA at 207.66, above the 50-day and 200-day SMAs.

In conclusion, TD Cowen's upgrade to Buy for Affiliated Managers Group reflects a positive outlook on the company's future prospects, driven by its strategic focus on high-growth areas and strong financial performance. Investors should closely monitor AMG's progress and consider the potential for steady organic growth and improved profit margins.

References:
[1] https://www.benzinga.com/insights/analyst-ratings/25/08/46824506/what-5-analyst-ratings-have-to-say-about-affiliated-managers-group
[2] https://www.gurufocus.com/news/3030463/amg-stock-upgraded-optimistic-outlook-for-growth-and-margins