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Investment Managers' Q3 Earnings on Oct 26: AMP, HOOD & More

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Investment managers (part of the broader Finance sector) have performed decently over the past several quarters. The trend is expected to have continued this time around too with support from decent equity markets.

Though the performance of equity markets was not great during the third quarter of 2021 (this one being worst performing since March 2020 quarter), several other factors including a substantial rise in volatility in the last few weeks of September, the Federal Reserve’s slight change in accommodative stance and solid economic growth kept the client activity high.

Thus, asset managers are expected to have witnessed a rise in assets under management (AUM) balance on the back of inflows during the quarter to be reported. Also, demand for alternative investment sources is expected to have aided revenue growth.

On the cost front, expenses are likely to have risen as these companies continue to invest in technology. Further, higher marketing costs are expected to have fueled the rise in costs.

Some of the industry players like BlackRock, Blackstone, and SEI Investments, which have already reported third-quarter results, have witnessed a rise in AUM balance and higher revenues.

Per our Earnings Preview, overall earnings for the finance sector for the third quarter are expected to grow 37.1% year over year. Notably, it recorded a surge of 147% in the prior quarter.

Let’s take a look at the investment management stocks that are slated to announce third-quarter 2021 results on Oct 26.

Ameriprise Financial (AMP - Free Report) ) is scheduled to report after market close. Based on expectations of improved advisor productivity, the Advice & Wealth Management segment is likely to have recorded growth in assets. The Zacks Consensus Estimate for management and financial advice fees (constituting almost 60% of the company’s total net revenues) is pegged at $2.35 billion, which suggests a rise of 4.3% from the prior quarter’s reported number.

Operating expenses are expected to have increased in the to-be-reported quarter due to advertising campaigns and technology upgrades.

The consensus estimate for third-quarter earnings of $5.46 per share indicates 271.4% growth from the year-ago reported number. The consensus estimate for revenues of $3.54 billion suggests a year-over-year rise of 18.7%.

Ameriprise has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — 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.

It has a Zacks Rank #2 (Buy) and an Earnings ESP of +1.10%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters, as shown in the chart below:
 

Ameriprise Financial, Inc. Price and EPS Surprise

Ameriprise Financial, Inc. Price and EPS Surprise

Ameriprise Financial, Inc. price-eps-surprise | Ameriprise Financial, Inc. Quote

Robinhood Markets, Inc. (HOOD - Free Report) is also scheduled to report after market close. The company expects seasonal headwinds and lower trading activity across the industry to result in lower revenues and fewer new funded accounts on a sequential basis.

The Zacks Consensus Estimate for the company’s third-quarter earnings is a loss of $1.33 per share. The consensus estimate for total revenues is pegged at $441.2 million, which indicates a 63.4% rise from the year-ago quarter’s reported figure.

The chances of Robinhood beating the Zacks Consensus Estimate this time are less as it currently carries a Zacks Rank #2 and has an Earnings ESP of -21.51%.
 

Robinhood Markets, Inc. Price and EPS Surprise

Robinhood Markets, Inc. Price and EPS Surprise

Robinhood Markets, Inc. price-eps-surprise | Robinhood Markets, Inc. Quote

Principal Financial Group, Inc. (PFG - Free Report) is slated to report after market close. The results are likely to reflect benefits from leadership in retirement and long-term savings, group benefits and protection in the United States, retirement and long-term savings in Latin America and Asia plus global asset management.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $3.99 billion, indicating an increase of 21.1% from the year-ago quarter reported figure. The consensus estimate for earnings stands at $1.59 per share, indicating an increase of 87.1%.

Further, chances of Principal Financial beating the Zacks Consensus Estimate are less this time as it has an Earnings ESP of -0.11% and Zacks Rank #3.

The company has a decent earnings surprise history. It surpassed the Zacks Consensus Estimate in three of the trailing four quarters.

Invesco Ltd. (IVZ - Free Report) is slated to announce results before market open. While its earnings are expected to have witnessed a rise in the to-be-reported quarter, revenues are projected to have declined on a year-over-year basis.

Supported by marginal growth in AUM balance, the company’s investment management fee is expected to have been positively impacted. The Zacks Consensus Estimate for the same is pegged at $1.47 billion, indicating an increase of 17.6% on a sequential basis.

The Zacks Consensus Estimate for the company’s third-quarter earnings is pegged at 73 cents, which has moved 1.4% lower over the past 30 days. The consensus estimate for revenues is pegged at $1.33 billion, which suggests a year-over-year decline of 10.9%.

Our proven model does not conclusively predict an earnings beat for Invesco this time around as it has an Earnings ESP of 0.00% and Zacks Rank #3.

Invesco has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters.

Invesco Ltd. Price and EPS Surprise

Invesco Ltd. Price and EPS Surprise

Invesco Ltd. price-eps-surprise | Invesco Ltd. Quote

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