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Rise in Assets Balance to Support Invesco (IVZ) Q4 Earnings
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Invesco (IVZ - Free Report) is slated to announce fourth-quarter and 2020 results on Jan 26, before market open. Its quarterly revenues and earnings are expected to have witnessed a decline on a year-over-year basis.
In the last reported quarter, the company’s adjusted earnings beat the Zacks Consensus Estimate. A decrease in operating expenses and net inflows were the major tailwinds.
Invesco does not have an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in one and lagged in three of the trailing four quarters.
The company’s activities and business prospects in the fourth quarter encouraged analysts to revise estimates upward. The Zacks Consensus Estimate for Invesco’s earnings of 57 cents has been revised 9.6% upward over the past 30 days. However, the figure indicates a decline of 10.9% from the year-ago quarter’s reported number.
The consensus estimate for sales is pegged at $1.59 billion, which suggests an 8.5% decline.
Before we take a look at what our quantitative model predicts, let’s check the factors that are expected to have influenced Invesco’s fourth-quarter performance.
Per the monthly metrics data published by Invesco, preliminary total AUM as of Dec 31, 2020, was $1,349.9 billion, up 10.8% from the Sep 30, 2020 level. The sequential rise was mainly driven by net inflows and upbeat markets.
Thus, supported by growth in assets, the company’s performance fees might have been positively impacted. The Zacks Consensus Estimate for performance fees for the to-be-reported quarter is pegged at $17.5 million, indicating substantial growth from the prior-quarter number.
Moreover, the consensus estimate for investment management fee is pegged at $1.13 billion, which indicates a rise of 2.8% sequentially. The consensus estimate for service and distribution fees of $363 million indicates a 2.8% rise.
On the cost front, while Invesco’s initiatives to manage costs have helped in improving its efficiency, continued rise in compensation and marketing costs has led to an increase in overall expenses over the past few years. Management expects fourth-quarter operating expenses to be modestly higher on a sequential basis, mainly due to increased marketing spend, and higher promotional and client activity.
Further, of the total one-time transaction costs of $250-$275 million for the realization of the cost-saving program, 40% will be incurred in the fourth quarter. Moreover, the company expects interest expenses to decrease nearly $9 million.
What Our Model Predicts
Per the Zacks model, the chances of Invesco beating the Zacks Consensus Estimate this time 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.
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 +2.49%.
Zacks Rank: The company currently sports a Zacks Rank #1 (Strong Buy).
Other Stocks That Warrant a Look
Here are some other finance stocks you may want to consider as these too have the right combination of elements to post an earnings beat in their upcoming releases, per our model.
Ameriprise Financial, Inc. (AMP - Free Report) is set to release earnings figures on Jan 27. The company, which carries a Zacks Rank #2 (Buy) at present, has an Earnings ESP of +1.43%.
The Earnings ESP for SEI Investments Company (SEIC - Free Report) is +3.38% and the company carries a Zacks Rank #3, currently. It is scheduled to report quarterly numbers on Jan 27.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
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Rise in Assets Balance to Support Invesco (IVZ) Q4 Earnings
Invesco (IVZ - Free Report) is slated to announce fourth-quarter and 2020 results on Jan 26, before market open. Its quarterly revenues and earnings are expected to have witnessed a decline on a year-over-year basis.
In the last reported quarter, the company’s adjusted earnings beat the Zacks Consensus Estimate. A decrease in operating expenses and net inflows were the major tailwinds.
Invesco does not have an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in one and lagged in three of the trailing four quarters.
Invesco Ltd. Price and EPS Surprise
Invesco Ltd. price-eps-surprise | Invesco Ltd. Quote
The company’s activities and business prospects in the fourth quarter encouraged analysts to revise estimates upward. The Zacks Consensus Estimate for Invesco’s earnings of 57 cents has been revised 9.6% upward over the past 30 days. However, the figure indicates a decline of 10.9% from the year-ago quarter’s reported number.
The consensus estimate for sales is pegged at $1.59 billion, which suggests an 8.5% decline.
Before we take a look at what our quantitative model predicts, let’s check the factors that are expected to have influenced Invesco’s fourth-quarter performance.
Per the monthly metrics data published by Invesco, preliminary total AUM as of Dec 31, 2020, was $1,349.9 billion, up 10.8% from the Sep 30, 2020 level. The sequential rise was mainly driven by net inflows and upbeat markets.
Thus, supported by growth in assets, the company’s performance fees might have been positively impacted. The Zacks Consensus Estimate for performance fees for the to-be-reported quarter is pegged at $17.5 million, indicating substantial growth from the prior-quarter number.
Moreover, the consensus estimate for investment management fee is pegged at $1.13 billion, which indicates a rise of 2.8% sequentially. The consensus estimate for service and distribution fees of $363 million indicates a 2.8% rise.
On the cost front, while Invesco’s initiatives to manage costs have helped in improving its efficiency, continued rise in compensation and marketing costs has led to an increase in overall expenses over the past few years. Management expects fourth-quarter operating expenses to be modestly higher on a sequential basis, mainly due to increased marketing spend, and higher promotional and client activity.
Further, of the total one-time transaction costs of $250-$275 million for the realization of the cost-saving program, 40% will be incurred in the fourth quarter. Moreover, the company expects interest expenses to decrease nearly $9 million.
What Our Model Predicts
Per the Zacks model, the chances of Invesco beating the Zacks Consensus Estimate this time 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.
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 +2.49%.
Zacks Rank: The company currently sports a Zacks Rank #1 (Strong Buy).
Other Stocks That Warrant a Look
Here are some other finance stocks you may want to consider as these too have the right combination of elements to post an earnings beat in their upcoming releases, per our model.
The Earnings ESP for Synovus Financial Corp. (SNV - Free Report) is +2.18% and the company sports a Zacks Rank of 1 at present. It is slated to report quarterly results on Jan 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ameriprise Financial, Inc. (AMP - Free Report) is set to release earnings figures on Jan 27. The company, which carries a Zacks Rank #2 (Buy) at present, has an Earnings ESP of +1.43%.
The Earnings ESP for SEI Investments Company (SEIC - Free Report) is +3.38% and the company carries a Zacks Rank #3, currently. It is scheduled to report quarterly numbers on Jan 27.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>