Zacks Investment Research downgraded shares of Waddell & Reed Financial Inc. (WDR) from OUTPERFORM to NEUTRAL on July 08, 2014, with a target price of $66.00.
We are downgrading our long-term recommendation on Waddell & Reed to Neutral due to rising expenses. Nevertheless, the company's first-quarter 2014 earnings surpassed the Zacks Consensus Estimate on the back of improved top-line. Enhanced AUM and a solid balance sheet acted as the tailwinds. The company's continuous growth and meaningful capital deployment activities are expected to boost shareholders' value going forward. However, fluctuating equity markets, rising competition and significant intangibles on its balance sheet are expected to undermine profitability in the near term.
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