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Restructuring Efforts Aid Ameriprise Despite Elevated Costs
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Ameriprise Financial (AMP - Free Report) is well-poised for growth, driven by its business-restructuring efforts and diversified investment portfolio. Also, the company’s efficient capital deployment activities reflect a strong balance sheet position.
The Zacks Consensus Estimate for its current-year earnings has been revised marginally upward over the past 30 days, reflecting analysts’ optimism regarding its earnings growth potential.
Moreover, the company’s price performance seems impressive. Over the past year, its shares have gained 23.9% compared with 11.4% growth recorded by the industry.
However, significant outflows in the Asset Management segment and steadily rising expenses are expected to hurt Ameriprise’s bottom line to some extent in the near term.
Currently, the company carries a Zacks Rank #3 (Hold).
Looking at its fundamentals, Ameriprise’s net revenues (GAAP basis) witnessed a CAGR of 3.2% over the last four years (2016-2019). Though GAAP revenues in the first half of 2020 declined, the company’s efforts to launch products are likely to keep supporting top-line growth in the quarters ahead.
Moreover, it has been constantly focusing on core operations to remain profitable. It has grown inorganically and restructured its business from time to time through divestitures and spin-offs. In 2019, it completed the sale of the Ameriprise Auto & Home (AAH) business. Also, it plans to offer a range of banking and credit products through its federal savings bank — Ameriprise Bank — to its wealth management clients. The initiatives are expected to further support financials.
Notably, as of Jun 30, 2020, Ameriprise’s total cash balance was higher than the total debt. Given the sufficient cash balance, it is expected to continue to be able to meet debt obligations in the near term, even if the economic situation worsens.
However, the company’s expenses (GAAP basis) have increased, witnessing a CAGR of 2% over the last six years (2014-2019). While expenses declined in the first half of 2020, overall costs are expected to remain elevated in the near term due to advertising campaign, hiring and technology upgrades.
Also, the Asset Management segment, which remains one of the major sources of Ameriprise’s revenues (accounting for 23.7% of total adjusted operating net revenues in the first six months of 2020) has been continuously witnessing significant outflows — $7.1 billion in 2019, $21.2 billion in 2018, $16.7 billion in 2017, $18.6 billion in 2016 and $15.8 billion in 2015. While the segment witnessed net inflows of $238 million in the first half of 2020, this may not continue in the quarters ahead amid a tough operating backdrop. Thus, this is likely to affect the segment’s performance.
Stocks to Consider
A few stocks from the finance space worth considering are mentioned below.
ETRADE Financial Corporation witnessed an upward earnings estimate revision of 13% for the current year over the past 60 days. Its share price has increased 28.2% over the past year. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for TD Ameritrade Holding Corporation’s (AMTD - Free Report) current fiscal year earnings has been revised 21.3% upward over the past 60 days. Its share price has decreased 12.6% over the past 12 months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Interactive Brokers (IBKR - Free Report) witnessed an upward earnings estimate revision of 26.9% for the current year over the past 60 days. Its share price has increased 11% over the past year. It currently carries a Zacks Rank #2.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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Restructuring Efforts Aid Ameriprise Despite Elevated Costs
Ameriprise Financial (AMP - Free Report) is well-poised for growth, driven by its business-restructuring efforts and diversified investment portfolio. Also, the company’s efficient capital deployment activities reflect a strong balance sheet position.
The Zacks Consensus Estimate for its current-year earnings has been revised marginally upward over the past 30 days, reflecting analysts’ optimism regarding its earnings growth potential.
Moreover, the company’s price performance seems impressive. Over the past year, its shares have gained 23.9% compared with 11.4% growth recorded by the industry.
However, significant outflows in the Asset Management segment and steadily rising expenses are expected to hurt Ameriprise’s bottom line to some extent in the near term.
Currently, the company carries a Zacks Rank #3 (Hold).
Looking at its fundamentals, Ameriprise’s net revenues (GAAP basis) witnessed a CAGR of 3.2% over the last four years (2016-2019). Though GAAP revenues in the first half of 2020 declined, the company’s efforts to launch products are likely to keep supporting top-line growth in the quarters ahead.
Moreover, it has been constantly focusing on core operations to remain profitable. It has grown inorganically and restructured its business from time to time through divestitures and spin-offs. In 2019, it completed the sale of the Ameriprise Auto & Home (AAH) business. Also, it plans to offer a range of banking and credit products through its federal savings bank — Ameriprise Bank — to its wealth management clients. The initiatives are expected to further support financials.
Notably, as of Jun 30, 2020, Ameriprise’s total cash balance was higher than the total debt. Given the sufficient cash balance, it is expected to continue to be able to meet debt obligations in the near term, even if the economic situation worsens.
However, the company’s expenses (GAAP basis) have increased, witnessing a CAGR of 2% over the last six years (2014-2019). While expenses declined in the first half of 2020, overall costs are expected to remain elevated in the near term due to advertising campaign, hiring and technology upgrades.
Also, the Asset Management segment, which remains one of the major sources of Ameriprise’s revenues (accounting for 23.7% of total adjusted operating net revenues in the first six months of 2020) has been continuously witnessing significant outflows — $7.1 billion in 2019, $21.2 billion in 2018, $16.7 billion in 2017, $18.6 billion in 2016 and $15.8 billion in 2015. While the segment witnessed net inflows of $238 million in the first half of 2020, this may not continue in the quarters ahead amid a tough operating backdrop. Thus, this is likely to affect the segment’s performance.
Stocks to Consider
A few stocks from the finance space worth considering are mentioned below.
ETRADE Financial Corporation witnessed an upward earnings estimate revision of 13% for the current year over the past 60 days. Its share price has increased 28.2% over the past year. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for TD Ameritrade Holding Corporation’s (AMTD - Free Report) current fiscal year earnings has been revised 21.3% upward over the past 60 days. Its share price has decreased 12.6% over the past 12 months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Interactive Brokers (IBKR - Free Report) witnessed an upward earnings estimate revision of 26.9% for the current year over the past 60 days. Its share price has increased 11% over the past year. It currently carries a Zacks Rank #2.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>