According to these firms, Legg Mason is taking significant steps to cut costs and improve margins, performance appears to be improving, and the company is generating strong excess capital, in parts because of a tax shield. While the fundamentals remain challenging, their expectations are improving as the company is delivering on the restructuring and the strong cash earnings are expected. Management believes that improved investment performance will eventually lead to a positive organic growth rate, but these firms believe in the short term, the company could face weakness in flows. According to these firms, while Legg Mason faces near-term headwinds in generating net inflows that continue to test many investors' patience, and until flow trends show sustainable improvement, it is likely to act as some lid on stock price performance.