SEI Investments (SEIC) is viewed as a net "beneficiary" of artificial intelligence, with low risk of "disruption," following a Q1 earnings beat that underscored strong margin expansion and sales momentum, Morgan Stanley said in a report Thursday.
The company beat expectations with earnings per share higher by $0.13, or about 10%, as revenue came in roughly 2% above consensus and expenses about 3% lower, while adjusted pre-tax margin reached 32%, the highest "since 2009," and net new sales hit a record $67 million, in part driven by major asset manager wins and reflecting a "diversified pipeline" with further expansion potential, the report said.
SEI is positioned to benefit from AI through cost efficiencies and productivity gains across areas such as reconciliation, reporting, compliance and outsourced back-office services, which could support further margin expansion, Morgan Stanley said.
The investment bank raised the company's 2026 EPS estimates by $0.52 to $5.87 and 2027 EPS by $0.44 to $6.62, reflecting higher margins and modest revenue upside, while maintaining a positive long-term outlook.
Morgan Stanley reiterated an overweight rating on SEI Investments and raised its price target to $113 from $108.
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