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Is an Earnings Surprise in Store for Invesco (IVZ) in Q1?

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Invesco (IVZ - Free Report) is scheduled to announce first-quarter 2019 results on Apr 25, before the market opens. Its revenues and earnings for the to-be-reported quarter are projected to decline year over year.

In the last reported quarter, the company’s adjusted earnings missed the Zacks Consensus Estimate. Results were adversely impacted by higher operating expenses and lower revenues.

Invesco doesn’t have an impressive earnings surprise history either. Its earnings have not surpassed the Zacks Consensus Estimate in any of the trailing four quarters.

Invesco Ltd. Price and EPS Surprise

 

Invesco Ltd. Price and EPS Surprise | Invesco Ltd. Quote

Also, activities of the company in the first quarter failed to encourage analysts. As a result, the Zacks Consensus Estimate for earnings of 52 cents has remained unchanged over the past seven days. Further, the figure reflects a decline of 22.4% from the year-ago reported figure.

Notably, the consensus estimate for sales for the to-be-reported quarter is pegged at $1.24 billion, which reflects a fall of 8.7% from the year-earlier quarter’s reported figure.

Now, let’s check the factors that are likely to impact Invesco’s first-quarter results.

Per the monthly metrics data published by Invesco, its preliminary assets under management (AUM) as of Mar 31, 2019, was $954.8 billion, up 7.5% from Dec 31, 2018 level. Moreover, preliminary average AUM of $932.8 billion (as reported by the company) as of Mar 31, 2019, reflects rise of nearly 1% sequentially.

Thus, given the rise in total and average AUM, performance fees and investment management fees are expected to have improved modestly during the first quarter.

On the cost front, Invesco’s initiatives to manage costs and improve efficiency are likely to have led to expense savings in the to-be-reported quarter. However, the company’s inorganic growth strategy and investments in franchise might have resulted in higher operating expenses.

Here’s what our quantitative model predicts:

The chances of Invesco beating the Zacks Consensus Estimate in the first quarter are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — for increasing the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Invesco is +0.64%.

Zacks Rank: Invesco currently has a Zacks Rank #2 (Buy). When combined with a positive ESP, it makes us reasonably confident of an earnings surprise call.

Other Stocks to Consider

Here are some other finance stocks that you may want to consider as these too have the right combination of elements to post an earnings beat this quarter, per our model.

BankUnited, Inc. (BKU - Free Report) has an Earnings ESP of +1.89% and carries a Zacks Rank of 3 at present. The company is slated to release results on Apr 24.

Associated Banc-Corp (ASB - Free Report) is expected to release results on Apr 25. It presently has an Earnings ESP of +0.55% and a Zacks Rank #3.

SVB Financial Group is slated to release results on Apr 25. It has an Earnings ESP of +0.42% and currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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