We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why it is Wise to Hold on to Invesco (IVZ) Stock Now
Read MoreHide Full Article
On May 22, we issued an updated research report on Invesco Ltd. (IVZ - Free Report) . The company’s strong balance sheet position along with improving assets under management (AUM) and diverse product offerings is likely to continue supporting growth. However, the use of high debt along with elevated expenses remains major near-term concerns.
The Zacks Consensus Estimate for the company’s current-year earnings has remained unchanged over the past seven days, reflecting that analysts are not very optimistic regarding its earnings growth potential. Thus, the stock currently carries a Zacks Rank #3 (Hold).
The company’s price performance does not seem very impressive. Its shares have lost 26.7% over the past year compared with 14.7% decline of the industry.
Looking at its fundamentals, net revenues have witnessed a five-year (2014-2018) CAGR of 1.4%, mainly driven by solid AUM balance. The company’s diverse product offerings and alternative investment strategies are likely to continue to attract investors. Moreover, given a robust institutional pipeline, along with a solid retail channel, the company will likely witness decent revenues.
While Invesco’s total AUM declined in 2018, it recorded a CAGR of 2.9% over the last five years (2014-2018). The uptrend continued in the first three months of 2019 as well. Notably, the deal to acquire OppenheimerFunds Inc. will likely result in further rise in the company’s AUM, making it one of the leading global asset managers.
Further, driven by a strong balance sheet position and consistently improving earnings, Invesco is expected to continue enhancing shareholder value through efficient capital deployment activities.
However, the company’s expenses increased at a three-year CAGR of 7.5% (2016-2018), mainly due to rise in compensation costs and marketing expenses. While it is undertaking measures that are likely to boost efficiency, operating expenses might rise in the quarters ahead, given its inorganic growth efforts and investment in franchise.
Also, high debt levels could restrict it from procuring additional finance for working capital, capital expenditure, acquisitions, debt service requirements or other purposes. High debt obligation, if combined with unfavorable economic and industry conditions, can drag the company to a relatively disadvantageous position.
Over the past 60 days, Cohen & Steers has witnessed an upward earnings estimate revision of 6.9% for 2019. Its share price has risen 37.9% over the past six months.
The Zacks Consensus Estimate for BlackRock’s current-year earnings has been revised 5.7% upward over the past 60 days. Its share price has increased 4.9% over the past six months.
Franklin Resources has witnessed an upward earnings estimate revision of 8.9% for fiscal 2019 over the past 60 days. Its share price has improved nearly 1% over the past six months.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Here's Why it is Wise to Hold on to Invesco (IVZ) Stock Now
On May 22, we issued an updated research report on Invesco Ltd. (IVZ - Free Report) . The company’s strong balance sheet position along with improving assets under management (AUM) and diverse product offerings is likely to continue supporting growth. However, the use of high debt along with elevated expenses remains major near-term concerns.
.jpg)
The Zacks Consensus Estimate for the company’s current-year earnings has remained unchanged over the past seven days, reflecting that analysts are not very optimistic regarding its earnings growth potential. Thus, the stock currently carries a Zacks Rank #3 (Hold).
The company’s price performance does not seem very impressive. Its shares have lost 26.7% over the past year compared with 14.7% decline of the industry.
Looking at its fundamentals, net revenues have witnessed a five-year (2014-2018) CAGR of 1.4%, mainly driven by solid AUM balance. The company’s diverse product offerings and alternative investment strategies are likely to continue to attract investors. Moreover, given a robust institutional pipeline, along with a solid retail channel, the company will likely witness decent revenues.
While Invesco’s total AUM declined in 2018, it recorded a CAGR of 2.9% over the last five years (2014-2018). The uptrend continued in the first three months of 2019 as well. Notably, the deal to acquire OppenheimerFunds Inc. will likely result in further rise in the company’s AUM, making it one of the leading global asset managers.
Further, driven by a strong balance sheet position and consistently improving earnings, Invesco is expected to continue enhancing shareholder value through efficient capital deployment activities.
However, the company’s expenses increased at a three-year CAGR of 7.5% (2016-2018), mainly due to rise in compensation costs and marketing expenses. While it is undertaking measures that are likely to boost efficiency, operating expenses might rise in the quarters ahead, given its inorganic growth efforts and investment in franchise.
Also, high debt levels could restrict it from procuring additional finance for working capital, capital expenditure, acquisitions, debt service requirements or other purposes. High debt obligation, if combined with unfavorable economic and industry conditions, can drag the company to a relatively disadvantageous position.
Stocks to Consider
Some better-ranked stocks from the finance space are Cohen & Steers, Inc. (CNS - Free Report) , BlackRock, Inc. (BLK - Free Report) and Franklin Resources, Inc. (BEN - Free Report) . All these stocks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, Cohen & Steers has witnessed an upward earnings estimate revision of 6.9% for 2019. Its share price has risen 37.9% over the past six months.
The Zacks Consensus Estimate for BlackRock’s current-year earnings has been revised 5.7% upward over the past 60 days. Its share price has increased 4.9% over the past six months.
Franklin Resources has witnessed an upward earnings estimate revision of 8.9% for fiscal 2019 over the past 60 days. Its share price has improved nearly 1% over the past six months.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>