Highlights

  • Goldman Sachs upgrades AMG to Buy, citing potential inflection in organic base fee growth.
  • USD218 target implies 17% upside; AMG trades near 52-week high of USD199.52.
  • AMG advances alternative strategies, including a minority stake in Verition Fund Management LLC.

Goldman Sachs on Thursday upgraded shares of Affiliated Managers Group, Inc. (NYSE: AMG) from Neutral to Buy, assigning a price target of USD218.00. The new target suggests an approximate 17% upside from AMG’s current trading levels near USD199.52, which sits close to the stock’s 52-week high.

The investment bank’s upgrade reflects growing confidence that AMG could see an inflection in organic base fee growth. Analysts highlighted accelerating flows across AQR, one of AMG’s major affiliates, alongside sustained momentum from private markets businesses and a slowdown in outflows from traditional long-only equity strategies.

Goldman Sachs forecasts 7% annual core EBITDA growth for AMG during 2026 and 2027, citing both fundamental operating trends and potential upside from performance fees. Altogether, these factors could drive high-single-digit total EBITDA growth as AMG continues to expand its focus on alternative affiliates.

The bank’s USD218 price target is based on a 7.5x EV/EBITDA multiple or 7.5x P/E ratio on projected earnings from the fifth through eighth quarters ahead, levels consistent with AMG’s historical valuation averages and its current market multiple.

Revised earnings per share projections from Goldman Sachs now stand at USD24.04 for 2025, USD27.81 for 2026, and USD32.34 for 2027. Notably, these forecasts for 2026 and 2027 are approximately 7% above current consensus estimates, reflecting Goldman Sachs’ expectations for operating leverage and incremental contributions from performance fees.

Beyond the rating change, AMG continues to execute on strategic initiatives in the alternatives space. The firm recently announced the appointment of Thomas M. Wojcik as President, while he retains his role as Chief Operating Officer. Wojcik’s leadership has coincided with significant growth in private markets and liquid alternative strategies, which now represent around half of AMG’s earnings.

Additionally, AMG disclosed plans to acquire a minority stake in Verition Fund Management LLC, a multi-strategy hedge fund manager overseeing roughly USD12.6 billion in assets. The transaction, expected to close in the second quarter of 2025, further deepens AMG’s presence in alternative investments and aligns with its established partnership-focused model.

Investors will be watching closely to see whether AMG can deliver the improved fee growth and earnings trajectory that Goldman Sachs envisions, especially amid shifting market dynamics and continued appetite for alternative investment exposure.