RBC raises Victory Capital target to $43 on strong 4Q results

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RBC raises Victory Capital target to $43 on strong 4Q results
Credit: © Reuters.

On Monday, RBC Capital Markets adjusted its outlook on Victory Capital Holdings, Inc. (NASDAQ: NASDAQ: VCTR ), increasing the firm's price target from $40.00 to $43.00 while retaining an Outperform rating on the stock. This change follows the company's reported earnings that surpassed expectations for the fourth quarter of 2023.

Victory Capital's recent financial disclosure revealed a performance that exceeded analysts' projections. The company's management expressed confidence in the potential for clients to adjust their portfolios and take on more risk, depending on the stabilization of interest rates. This optimism is underpinned by a favorable environment for mergers and acquisitions, with actionable opportunities anticipated within the current year.

RBC Capital's analysis suggests a positive stance on Victory Capital's growth strategy, which includes both inorganic expansion through acquisitions and organic growth. The firm's Outperform rating reflects confidence in Victory Capital's potential to capitalize on these strategic avenues.

The revised price target to $43.00 from the previous $40.00 is a reflection of the robust fourth-quarter performance and the promising growth trajectory outlined by Victory Capital's management. The target adjustment is indicative of RBC Capital's expectation of the company's continued progress and success in the financial services sector.

Victory Capital Holdings, with its latest financial results and strategic outlook, remains a company of interest for investors, as reflected in the maintained Outperform rating and the elevated price target set by RBC Capital. The market will continue to monitor the company's performance and its ability to execute on the identified opportunities for expansion and client portfolio optimization.

InvestingPro Insights

Following RBC Capital Markets' updated outlook on Victory Capital Holdings, Inc. (NASDAQ: VCTR), the market sentiment appears to be in alignment with the firm's financial health and strategic initiatives. InvestingPro data highlights a market capitalization of $2.37 billion, reflecting the company's substantial presence in the financial services sector. With a Price/Earnings (P/E) ratio of 11.46, Victory Capital trades at a valuation that may attract investors looking for reasonably priced earnings potential. Notably, the company's P/E ratio adjusted for the last twelve months as of Q4 2023 stands at a lower 10.23, potentially indicating an even more attractive valuation.

Victory Capital's financial strength is further underscored by its dividend track record, with the company having raised its dividend for five consecutive years, a testament to its commitment to shareholder returns. The dividend yield as of the latest data stands at 3.64%, coupled with an impressive dividend growth of 28.0% over the last twelve months as of Q4 2023. Additionally, Victory Capital's share price is trading near its 52-week high, at 97.58% of the peak, which may signal investor confidence in the stock's performance.

InvestingPro Tips highlight that management's aggressive share buybacks and a strong return over the last three months, with a price total return of 20.4%, could be indicative of the company's bullish outlook and operational efficiency. With six analysts having revised their earnings upwards for the upcoming period, Victory Capital appears poised for continued profitability, as analysts predict the company will be profitable this year, supported by a solid performance over the last twelve months.

For investors seeking more in-depth analysis and additional insights, there are 9 more InvestingPro Tips available for Victory Capital on InvestingPro. These tips delve into the company's financial stability, long-term performance, and market expectations, providing a comprehensive picture for potential investors. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking the full suite of advanced metrics and expert analysis that InvestingPro offers.

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