Morgan Stanley Ends Coverage of Platinum Asset Management

Highlights:

• Morgan Stanley Ceases Coverage: Morgan Stanley (MS) has stopped its equity research coverage of Platinum Asset Management (ASX: PTM) due to a reallocation of resources.
• Stock Performance and Analyst's View: The asset manager's shares have dropped over 70% in the past three years, with Morgan Stanley's last price target set at 90 cents, down from the last traded price of AU$1.04.
• Turnaround Hinges on Inflows: Analyst Andrei Stadnik noted that Platinum Asset Management's future success will depend on attracting new inflows, despite strong balance sheet and cost management efforts.

Broker Reallocation Leads to Dropped Coverage

Morgan Stanley (MS) has officially ceased its coverage of Platinum Asset Management (ASX: PTM), citing a reallocation of resources as the reason for this decision. The move marks the end of equity research on the Australian-based asset manager, which had been under Morgan Stanley’s radar with an "underweight" rating.

Stock Performance and Analyst's Final Remarks

Prior to dropping coverage, Morgan Stanley had set a price target of 90 cents for Platinum Asset Management, a significant decrease from the stock's last traded price of AU$1.04. The asset manager’s shares have plummeted by more than 70% over the past three years, reflecting the challenges faced by the company in an increasingly competitive market.

In his final analysis, equity analyst Andrei Stadnik commented on the company's potential for a turnaround, emphasizing that the future performance of Platinum Asset Management would largely depend on its ability to attract new inflows. Stadnik acknowledged the firm’s strong balance sheet and recent efforts to enhance cost management, but he remained cautious, noting that cost control alone is not typically sufficient to drive outperformance in asset management stocks.

Implications for Platinum Asset Management

The decision by Morgan Stanley to discontinue coverage is a notable development for Platinum Asset Management. It highlights the ongoing challenges the firm faces in regaining investor confidence and market share. With the absence of further analysis from Morgan Stanley, market participants will closely watch how Platinum Asset Management navigates its strategy and whether it can reverse its downward trajectory in the coming quarters.

Investors and industry observers will now turn to other analysts and financial institutions for insights into the future of Platinum Asset Management as the company continues to focus on stabilizing its operations.

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