JHG - Janus Henderson cut to Underweight at J.P. Morgan on 'growth investing' weakness

J.P. Morgan analyst Kenneth Worthington downgraded Janus Henderson ( NYSE: JHG ) on Monday to Underweight from Neutral as "growth investing", the subject of JHG's focus, has significantly underperformed in 2022, leading to the firm's fee-earning assets declining more quickly than its peers.

"Performance fees look increasingly to be negative in aggregate for 2022 and possibly 2023 as underperformance 'accumulates,'" Worthington wrote in a note to clients.

Also, Janus Henderson ( JHG ) appears to have less expense flexibility near term, given its "transformational investments," the analyst wrote.

"Janus ( JHG ) has a new CEO that might reprioritize investment dollars or could leverage the balance sheet to acquire new businesses or to return capital to shareholders," Worthington said. "Janus could be a seller. Backing by savvy Trian investor Nelson Peltz is also a risk given its nearly 20% ownership."

Janus shares ( JHG ) are slipping 0.3% in late Monday morning trading, while the broader financial sector is rising — the Financial Select Sector SPDR ETF ( XLF ) is up 0.7% .

Note that in March Seeking Alpha's Quant system, which consistently beats the market, flagged JHG for a high risk of performing poorly. Meanwhile, the average Wall Street rating for the stock in Hold.

In May, SA contributor Intrinsic Analysis said the stock's fundamental valuation appeal remains attractive

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