If you include dividends the Magellan Financial Group Ltd (ASX: MFG) share price is up 100% over just the past year to $53.14 today, but a lot of professional research analysts believe the stock's value may of got ahead of itself.
According to MarketScreener the median share price valuation among 11 analysts is $47.10. However, it's worth noting that median price targets and the like can reflect old news or be outdated with total funds under management and investment performance at Magellan varying on a daily basis.
According to financial news wires one of Australia's most famous investment banks and research houses has lifted its rating on Magellan shares to neutral with a $50 price target. That's actually quite bullish though compared to the analysts at Goldman Sachs who have a $39.52 price target on the business.
Goldman's is forecasting Magellan will pay total dividends of $1.93 on adjusted earnings per share of $2.145 over fiscal 2020.
This looks a little light on to me given Magellan is well positioned to deliver another strong half of underlying profit growth to December 31 2019.
If we assume Goldman's is on the money with its forecasts Magellan shares sell for 24.8x fiscal 2020's earnings per share with a fully franked 3.63% dividend yield.
Of course where final earnings and dividends land will depend greatly on performance fees and the known unknown of how US equity markets in particular perform out to June 30, 2020.
Therefore we can see that even short-term forecasting is a hazardous business and as an investor it might be best to focus on the underlying quality of a business before 12-month price targets.
Other fund managers currently performing well for investors include VGI Partners Ltd (ASX: VGI) and Pinnacle Investment Management Group Ltd (ASX: PNI).
