Legg Mason (NYSE:LM) Remains Weak Against Peers Says FBR

Legg Mason (NYSE:LM) continues to receive a negative outlook from FBR, citing their underperformance against their peers.

FBR says, "We continue to have a negative outlook on LM shares, as we believe the company is in a relatively weaker position than peers, given its persistent net outflows, weaker equity product offerings, and inconsistent performance. In the current environment in which macro improvement and equity market appreciation continue at a steady pace, we expect an overall slowdown in flows into bond funds industrywide as clients re-risk their portfolios. Furthermore, considering that only 27% of LM's assets are invested in equity products, and given the company's revenue-sharing agreements with affiliates, we expect LM investors would not fully participate in a complete market recovery. Although we expect further cost cutting and market appreciation to overcome further outflows and drive higher overall operating margins, we believe the market is mostly pricing in such an improvement, leaving limited upside potential from current levels."

FBR Capital maintains an "Underperform" rating on Legg Mason (LM), which closed Thursay at $34.01, up $0.26, or 0.77 percent. FBR also lowered their price target on Legg Mason from $35 to $34.