By Kit Norton
Wall Street has weighed in on Pershing Square Inc., asserting that billionaire Bill Ackman's management company has an enviable and stable business model but that the current share price is more than fair value.
Pershing Square stock rose 1.2% to $36.08 on Tuesday. Wall Street has been buying shares this month, with the stock up 32% in May. Since shares of Pershing Square began trading on April 29, the stock has gained 49%. However, the stock has declined 30% from its record closing high of $52.09 from May 11, according to Dow Jones Market Data.
Pershing Square is a U.S. asset management firm that manages concentrated portfolios of public large-cap equities and can apply asymmetric hedges. It is also the first hedge fund to market directly to U.S. retail investors, according to Bank of America analysts.
Ackman raised $5 billion, before fees, for the combined initial public offering of Pershing Square USA and Pershing Square. Investors in the public offering got one share of Pershing Square for every five shares of Pershing Square USA.
Of the the seven analysts polled by FactSet, Pershing Square stock has an average Hold rating with a price target of $40. That currently represents about 11% upside.
The broad view among analysts is that around 97% of Pershing Square fee-paying base is permanent capital that drives stable, recurring fees, which will lead to long-term net asset value compounding.
However, the current consensus seems to be that the share price properly weighs the risks and the rewards in the company.
A slew of firms this week initiated coverage of Pershing Square. Jefferies handed the stock a Hold rating with a price target of $40. Meanwhile, RBC Capital analyst Kenneth Lee initiated coverage with a Sector Perform rating, also setting a $40 price target on Pershing Square.
UBS analysts started Pershing Square with a Neutral rating and a $39 price target while Wells Fargo has an Equal Weight rating on Pershing Square and a $37 price target.
Oppenheimer analysts Christ Kotowski and John Coffey on Tuesday initiated coverage of Pershing Square with a Perform rating but without a price target.
"While there are many reasons to admire its unique business model, it strikes us as fairly richly valued at this juncture," Kotowski and Coffey wrote.
The analysts explained that Pershing Square Ihas aspects of both a mutual fund and a private equity manager.
"The wonderful thing about the PS business model is that it is the most resilient form of assets under management. The downside is that it is the hardest form of capital to raise as the closed-end fund vehicles tend to trade below net asset value," the Oppenheimer analysts added.
Meanwhile, a Bank of America analyst team, led by Craig Siegenthaler, on Sunday initiated coverage of Pershing Square with a Neutral rating and a $42 price target, implying 16% upside.
Siegenthaler highlighted how nearly 100% of Pershing Square fee-paying assets under management are permanent and can't be redeemed.
This helps the company avoid forced-selling situations and also allows the firm to focus on investing and allocate less resources to marketing, according to Bank of America.
"These qualities are why PS's model is referred to as 'baby Buffett' as it replicated similar Berkshire Hathaway features," Siegenthaler wrote.
"Pershing Square and Ackman have built one of the strongest brands in asset management and are seeking to tap into that retail goodwill for the first time," the Bank of America analysts wrote.
Shares of Ackman's closed-end investment fund Pershing Square USA declined 1.8% to $40.55 on Tuesday.
Write to Kit Norton at kit.norton@barrons.com
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May 26, 2026 12:28 ET (16:28 GMT)
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