Is Victory Capital’s US$110 Million Synergy Target After Amundi Deal Changing the Investment Case for VCTR?

• Earlier this quarter, Merion Road Capital Management re-initiated a position in Victory Capital Holdings shortly after the company's acquisition of Amundi US, expanding Victory Capital’s assets under management above US$300 billion.
• A distinguishing insight from this event is Victory Capital’s upward revision of its cost synergy target to US$110 million, along with management's emphasis on future free cash flow potential and cross-selling opportunities.
• We'll examine what these expanded cost synergies and renewed investor interest could mean for Victory Capital’s investment narrative ahead.

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Victory Capital Holdings Investment Narrative Recap

To be a shareholder in Victory Capital Holdings, you need to believe in the firm's ability to deliver consistent asset growth and improve earnings by integrating acquisitions and realizing meaningful cost synergies. The recent increase in Victory Capital’s cost synergy target following the Amundi US acquisition could enhance near-term cash flow, a key catalyst, but does not fundamentally lessen the ongoing risk of net client outflows, which remains significant for revenue stability.

Among recent announcements, Victory Capital’s completion of a substantial share buyback program stands out, reinforcing management’s confidence in the company’s current valuation and future cash flow potential. This move is relevant to the narrative, as it reflects an effort to balance shareholder returns while integrating the Amundi US business and pursuing broader growth initiatives.

Yet, despite these positive signals, investors should be aware that continued outflows, even amid acquisitions and buybacks, pose a challenge to...

Read the full narrative on Victory Capital Holdings (it's free!)

Victory Capital Holdings is projected to reach $1.8 billion in revenue and $735.1 million in earnings by 2028. This outlook implies a 20.4% annual revenue growth rate and an increase in earnings of $470.5 million from current earnings of $264.6 million.

Uncover how Victory Capital Holdings' forecasts yield a $74.00 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Three community-sourced fair value estimates for Victory Capital range from US$66.01 to US$74, reflecting varied expectations among Simply Wall St Community members. While you weigh these views, keep in mind the ongoing concern around net outflows and its impact on future growth.

Explore 3 other fair value estimates on Victory Capital Holdings - why the stock might be worth just $66.01!

Build Your Own Victory Capital Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Victory Capital Holdings research is our analysis highlighting 2 key rewards that could impact your investment decision.
• Our free Victory Capital Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Victory Capital Holdings' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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