Cowen (COWN), is an American financial services provider.

It primarily offers trading, research, financial banking and asset management services. The stock is a bearish investment. (See TipRanks Analysts Top Stocks).

Stock Repurchases and Earnings

Cowen increased its share-repurchase plan to $50 million in September, an increase of $900,000.

Cowen’s decision to repurchase additional shares was made after the company reported its Q2 results. The revenue of the investment bank fell by 30% year-over-year. However, it retained its quarterly dividend at $0.10.

Cowen’s Diluted EPS took a 25% drop over the last quarter. It’s possible the stock’s price could be lowered due to the close correlation.

Future Outlook

Cowen’s company focuses a lot on asset management and trading.

During the initial pandemic pullback buying spree, Cowen managed to rack up a significant amount of growth in its main segments, with trading commissions growing by 42.2%, and asset management fees growing by 55.9%. Given the current market outlook, Cowen could be subject to a pullback due to its flat brokerage volume and net-long asset portfolio.

Public offerings are expected to slow after the SPAC IPO and Mid-Market IPO craze of the past two decades.

Declining Momentum

Cowen trades below its 200-, 100–, and 50-day moving averages. Recent confirmation by Jerome Powell that 2022 will see higher interest rates has given financial stocks some momentum. Cowen isn’t likely to benefit because the bulk of its business doesn’t depend on loan origination.

The stock’s RSI is in the 50s, so there’s no reason to say that it’s an overbought stock, but investors may well end up selling aggressively after the stock’s outperformance last year.

Wall Street Take

Wall Street has rated the stock as a Moderate Sell and expressed concern about its prospects. James Yaro, Goldman Sachs (NYSE) has given the stock a $35 price target. This is the lowest rating in the last three months and represents 0.3% upside potential.

Final Thoughts

The Cowen stock is over. Although the stock enjoyed a stellar year in 2020, and much of 2021 in particular, a slower segment growth rate could cause a decline.

Disclosure: Steve Gray Booyens had no position in the securities listed in this article at the time it was published.

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