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Invesco (IVZ) Surges 7.6%: Is This an Indication of Further Gains?

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Invesco (IVZ - Free Report) shares soared 7.6% in the last trading session to close at $17.58. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 18.9% gain over the past four weeks.

The Federal Reserve signaled the end of the current rate hike cycle and kept the interest rates unchanged at a 22-year high of 5.25-5.5% at the end of the two-day FOMC meeting. Further, the central bank indicated three interest rate cuts by 2024 end. These developments turned investor sentiments bullish on finance stocks as high funding costs will somewhat come down next year, thus supporting spread income and margin. Also, going forward, such monetary easing is likely to propel consumer spending. Hence, the Invesco stock moved higher.

This investment management company is expected to post quarterly earnings of $0.37 per share in its upcoming report, which represents a year-over-year change of -5.1%. Revenues are expected to be $1.1 billion, down 0.6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Invesco, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on IVZ going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Invesco belongs to the Zacks Financial - Investment Management industry. Another stock from the same industry, Lazard (LAZ - Free Report) , closed the last trading session 4.9% higher at $34.95. Over the past month, LAZ has returned 19.4%.

Lazard's consensus EPS estimate for the upcoming report has changed -2.5% over the past month to $0.38. Compared to the company's year-ago EPS, this represents a change of -44.9%. Lazard currently boasts a Zacks Rank of #4 (Sell).


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