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Morgan Stanley downgrades Virtu Financial, WisdomTree Investments

Written by Jasir Jawaid

Morgan Stanley analyst Michael Cyprys downgraded WisdomTree Investments Inc. to "underweight" from "equal-weight," saying the company's "wide valuation premium" to peers factors in a more optimistic organic growth forecast than what he sees as achievable.

The analyst cited greater pricing risk, a more competitive environment and concerns about the "significant" market share losses in the company's gold exchange-traded fund franchise.

The price target was raised to $4.75 from $3.50.

WisdomTree's 2020 EPS estimate remains unchanged at 24 cents, while its 2021 and 2022 EPS estimates were raised to 24 cents from 21 cents and to 24 cents from 23 cents, respectively.

Cyprys also downgraded Virtu Financial Inc. to "underweight" from "equal-weight," writing that the company's revenues could compress 42% in 2021 as volatility levels normalize.

The price target remains unchanged at $24.00.

He maintained Virtu's 2020 EPS estimate at $5.40 and increased the company's 2021 EPS estimate to $2.20 from $2.11. The 2022 EPS estimate for Virtu was decreased to $2.10 from $2.15.

This article was published by S&P Global Market Intelligence on the S&P Capital IQ Pro platform.


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