The Expensive Ideal: Wall Street gave its first and cautious assessments of Ackman's "baby Buffet"

For the first time since billionaire Bill Ackman's Pershing Square's investment company went public on the New York Stock Exchange, analysts have issued recommendations on its shares - and most of them are neutral. Wall Street recognizes the investment strategy's good long-term returns, solid business model and rare-to-market structure, for which Pershing Square has been compared to Berkshire Hathaway. But after the quotations have grown one and a half times since the IPO, many believe that much of the potential of the "baby Buffett" securities has already been factored into their price.

Shares of Pershing Square have been assigned an average rating of Hold, Barron's reported, citing data from FactSet, which polled seven analysts. The securities' target price of $40 apiece implies a potential upside of 11% over the next year.

Most major banks took a cautious stance: Jefferies, RBC, UBS and Wells Fargo assigned neutral ratings to Ackman Investment Company with targets from $37 to $40 per paper. Oppenheimer Investment Bank also started with advice not to sell but also not to buy the stock (Perform rating), but without specifying a target price. The only clear optimist was Citibank, which recommended buying the stock with the aim of growth up to $50, CNBC notes.

Wall Street experts agree that the advantage of Ackman's business lies in its structure: about 97% of the capital under management, from which the investment company takes commissions, is protected from early withdrawal by investors - this guarantees the fund stable and predictable revenue. Bank of America has dubbed the Pershing Square model "baby Buffett" for copying billionaire Warren Buffett's Berkshire Hathaway approach, Barron's reports.

According to Wall Street, the current market price already fully reflects all of Pershing's strengths. "While there are many reasons to admire its unique business model, at this stage it seems to us rather overpriced," said Oppenheimer analysts Chris Kotowski and John Coffey.

UBS analyst Michael Brown added that investors have already put the stability and predictability of the business into the price of the securities. Now the company will need good reasons to continue the rally - strong financial results or attraction of new capital.

Despite the strong brand, the loyalty to which Ackman is trying to monetize for the first time through retail investors, the business carries specific risks. BofA warned that Pershing Square is critically dependent on the founder himself: any reduction in Ackman's involvement - for example, due to retirement or political ambitions - would directly hit the fund's returns and scare away investors, Reuters reports.

Although shares of Pershing Square in New York have risen 50% from $24 to $36 since their stock exchange debut on April 29, they are down 30% from their May high, Barron's points out. In addition, shares of a related closed-end fund, Pershing Square USA, are now trading about 20% below the IPO price, Reuters states.

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