Few shares of the S&P/ASX 200 Index (ASX: XJO) have had a rougher trot in recent years than the Magellan Financial Group Ltd (ASX: MFG) share price. It was only back in February 2020 that Magellan was a $65 share. Today, it is going for $15.75 at the time of writing, down a nasty 2.4% for the day so far.
This latest loss puts Magellan down more than 17% in 2022 so far, and down almost 62% over the past 12 months. Saying that, the company has bounced off of the new 52-week low of $13.22 that we saw back in March.
It’s been a long series of unfortunate events that have culminated in Magellan losing so much of its value over the past two years or so. We’ve had the departure of Magellan’s co-founder and former chief investment officer/stock-picking star Hamish Douglass. We’ve also had chronic underperformance of Magellan’s investment funds, the loss of several institutional investors and a significant decline in funds under management.
But now that the Magellan share price seems to have found a bottom, could it be about to stage a big comeback this June?
Is the Magellan share price about to stage a June comeback?
Well, the answer is no, at least according to ASX broker Morgan Stanley. As my Fool colleague James reported earlier this month, Morgan Stanley Is still maintaining an underweight rating on Magellan shares, with a 12-month share price target of just $11. If Magellan hits $11 a share, it would fall well below its current 52-week low of $13.22.
Morgan Stanley reckons Magellan’s continuing fund outflows will continue unless the company starts delivering some outperformance in its investment funds. The broker is arguing that until some of Magellan’s long-term performance metrics improve, investors will continue to see little reason to invest in Magellan’s offerings.
So it’s probably fair to say that Morgan Stanley is not pencilling in a June comeback for the Magellan share price. The broker could be wrong of course, but we shall have to wait and see.
At the current Magellan share price, this ASX 200 fund manager has a market capitalisation of $2.93 billion, with a trailing dividend yield of 14.22%.
The post Can the Magellan share price stage a comeback in June? appeared first on The Motley Fool Australia.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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