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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 2019 results on Jan 29, before market open. Revenues and earnings for the to-be-reported quarter are expected to have grown year over year.

In the last reported quarter, adjusted earnings surpassed the Zacks Consensus Estimate. Results reflected improvement in assets under management (AUM) and rise in revenues, driven by the OppenheimerFunds buyout.

Invesco has an impressive earnings surprise history. The company’s earnings surpassed the consensus estimate in three of the trailing four quarters.

Further, analysts are bullish on the stock. The Zacks Consensus Estimate for earnings of 70 cents has moved 1.4% upward over the past seven days. The figure indicates a jump of 59.1% from the year-ago reported number. Also, the consensus estimate for sales is pegged at $1.75 billion, which suggests 39% growth.

Invesco Ltd. Price and EPS Surprise

Invesco Ltd. Price and EPS Surprise

 

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

Factors at Play

Per the monthly metrics data published by Invesco, preliminary total AUM as of Dec 31, 2019, was $1,226.2 billion, up 3.5% from Sep 30, 2019 level. The rise seems to be majorly driven by net inflows.

The Zacks Consensus Estimate for average AUM is pegged at $1,216 billion, indicating a rise of 3.4% from the prior-quarter reported figure. Hence, performance fees and investment management fees are likely to have recorded moderate growth in the fourth quarter.

Nonetheless, the consensus estimate for service and distribution fees is $380 million, down 1.3% sequentially.

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 slightly higher operating expenses.

Earnings Whispers

The chances of Invesco beating the Zacks Consensus Estimate in the fourth 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.

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 +1.39%.

Zacks Rank: The company currently has a Zacks Rank #2 (Buy).

Other Investment Management Stocks to Consider

Here are some other asset management stocks that you may want to consider as these have the right combination of elements to post an earnings beat this quarter.

SEI Investments Company (SEIC - Free Report) is slated to release results on Jan 29. It has an Earnings ESP of +2.35% and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ameriprise Financial, Inc. (AMP - Free Report) is slated to release results on Jan 29. It presently has an Earnings ESP of +0.39% and a Zacks Rank #2.

Legg Mason, Inc. (LM - Free Report) has an Earnings ESP of +1.59% and carries a Zacks Rank #2 at present. The company is scheduled to release results on Jan 29.

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