AMDUF - Amundi: Valuation Remains Supported By Long-Term Growth Potential

2024-06-07 23:20:28 ET

Summary

• Shares of French asset manager Amundi have returned over 30% in local currency terms since my opening piece last September.
• The business is off to a solid start in 2024, with higher market levels boosting assets under management, management fees and earnings.
• Amundi's retail distribution agreements are a positive feature of its business. While it may face headwinds in terms of renewals, 4-5% annualized growth in AUM can yield double-digit annualized returns.

Shares of French asset manager Amundi ( OTCPK:AMDUF ) have done well since my opening article last September, returning over 30% with dividends in local currency terms. Back then, I argued that a then-P/E of around 10x was more than a fair price for the stock. While Amundi faced both idiosyncratic and industry risks, the implied high-single-digit dividend yield only required low-single-digit supplemental annual growth on top, which the company should be able to deliver over time based on naturally increasing assets under management ("AUM")....

For further details see: