Artisan Partners Q3 adjusted EPS beats analyst expectations; revenue up as fees increase

What happened

Artisan Partners' third-quarter adjusted earnings per share beat analyst expectations at $1.03 versus $0.96. Revenue rose to $312.50 mln as fund management fees increased, and the company declared a quarterly dividend of $0.88 per share.

Confirmed

Global impact / market context

Higher fund fees and a profit beat suggest Artisan earns more from the money it manages. The dividend returns cash to shareholders, which may support investor interest even as clients withdraw money from public-equity strategies.

Analyst inference

Net outflows of $10.6 bln from public-equity redemptions, including the US Value wind-down, contrast with about $1.1 bln of net inflows into credit and alternative strategies. Analysts currently rate the shares a hold, reflecting mixed views.

Analyst inference

What to watch

1. Artisan plans to launch its first ETF share classes in the fourth quarter and is developing an interval fund for wealth clients, which is a fund that limits how often investors can withdraw cash. Confirmed
2. Continued public-equity redemptions could shrink the fee-earning assets that generate revenue, so growth in credit and alternative inflows would need to offset those withdrawals to keep fund management fees rising. Analyst inference
3. The average analyst rating is hold with a median 12-month price target of $34.50, so future results and new fund launches could influence whether recommendations and targets change. Analyst inference

Evidence

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