In major news on Australian stocks, shares of Magellan Financial Group Ltd (AU:MFG) surged by almost 8% after the company announced a positive update on its FUM (funds under management). The company’s total FUM increased by AU$900 million to AU$37.2 billion for February as compared to the AU$36.3 billion reported in January. The growth could possibly be driven by the improved performance of the share markets.
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Magellan Financial is an Australian investment firm dedicated to managing the funds of both domestic retail and institutional clients.
An Encouraging Update
In February, Magellan Financial’s retail funds increased by AU$700 million to AU$17.7 billion, while the institutional funds grew by AU$200 million to AU$19.5 billion.
Additionally, the company’s outflows in February represent one of the smallest monthly outflows in the past few years. The February net outflows, totaling AU$0.2 billion, comprised net retail outflows of AU$0.1 billion and net institutional outflows of AU$0.1 billion.
Among its asset classes, global equities saw the highest increase and grew AU$900 million to AU$16.4 billion.
Citi Analyst’s Reaction
Following the update, analyst Christopher Kightley from Citi maintained a cautious view regarding the company’s FUM growth in the short term. The analyst is awaiting February’s complete performance figures before reaching a definitive conclusion.
Kightley has a Sell rating on Magellan Financial stock with a price target of AU$8.10, which implies a downside of 12% from the current levels.
Is MFG a Good Stock to Buy?
On TipRanks, MFG stock has a Moderate Sell consensus rating based on one Buy, three Hold, and four Sell recommendations. The Magellan Financial share price forecast of AU$8.64 implies a downside of 6.2% from current levels.
