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Invesco's (IVZ) Q3 Earnings to Gain From Rise in AUM Balance
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Invesco (IVZ - Free Report) is scheduled to report third-quarter 2021 results on Oct 26, 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.
In the last reported quarter, the company’s adjusted earnings outpaced the Zacks Consensus Estimate. Results reflected an improvement in revenues and solid growth in assets under management (AUM) balance.
Invesco has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the beat being 14.07%, on average.
The Zacks Consensus Estimate for Invesco’s third-quarter earnings is pegged at 73 cents, which has moved 1.4% lower over the past 30 days. Nonetheless, the figure indicates growth of 37.7% from the year-ago quarter’s reported number.
The consensus estimate for revenues is pegged at $1.33 billion, which suggests a year-over-year decline of 10.9%.
Factors at Play
Per the monthly metrics data published by Invesco, preliminary total AUM as of Sep 30, 2021, was $1,528.6 billion, up marginally from the Jun 30, 2021 level. The rise was mainly driven by net inflows while unfavorable market returns somewhat hurt.
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 consensus estimate for service and distribution fees of $409 million indicates a 2% sequential improvement. The Zacks Consensus Estimate for other revenues is pegged at $65 million, implying a rise of 3.2%.
On the other hand, the consensus estimate for performance fees of $9.6 million indicates a decline of 8.6%.
Management expects money market fee waivers to hurt top-line growth to some extent.
On the cost front, while Invesco’s cost-saving initiatives are likely to have boosted its efficiency, the steady rise in compensation and marketing costs is expected to have had an adverse impact on the overall expense level in the third quarter. Also, the company is expected to have incurred restructuring charges related to its cost-saving program.
Management expects operating expenses to increase modestly on a sequential basis on the assumption that there is no change in markets and foreign exchange levels. Also, a modest rise in marketing-related expenses is expected on seasonality.
What Our Model Predicts
Our proven model does not conclusively predict an earnings beat for Invesco this time around. This is because it does not have 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 0.00%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Asset Managers That Warrant a Look
Here are few asset management stocks that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around
The Earnings ESP for Ameriprise Financial, Inc. (AMP - Free Report) is +1.10% and it carries a Zacks Rank #2 (Buy) at present. The company is slated to report quarterly numbers on Oct 26.
KKR & Co. Inc. (KKR - Free Report) is scheduled to release earnings on Nov 2. The company currently carries a Zacks Rank #2 and has an Earnings ESP of +1.34%.
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Invesco's (IVZ) Q3 Earnings to Gain From Rise in AUM Balance
Invesco (IVZ - Free Report) is scheduled to report third-quarter 2021 results on Oct 26, 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.
In the last reported quarter, the company’s adjusted earnings outpaced the Zacks Consensus Estimate. Results reflected an improvement in revenues and solid growth in assets under management (AUM) balance.
Invesco has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the beat being 14.07%, on average.
Invesco Ltd. Price and EPS Surprise
Invesco Ltd. price-eps-surprise | Invesco Ltd. Quote
The Zacks Consensus Estimate for Invesco’s third-quarter earnings is pegged at 73 cents, which has moved 1.4% lower over the past 30 days. Nonetheless, the figure indicates growth of 37.7% from the year-ago quarter’s reported number.
The consensus estimate for revenues is pegged at $1.33 billion, which suggests a year-over-year decline of 10.9%.
Factors at Play
Per the monthly metrics data published by Invesco, preliminary total AUM as of Sep 30, 2021, was $1,528.6 billion, up marginally from the Jun 30, 2021 level. The rise was mainly driven by net inflows while unfavorable market returns somewhat hurt.
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 consensus estimate for service and distribution fees of $409 million indicates a 2% sequential improvement. The Zacks Consensus Estimate for other revenues is pegged at $65 million, implying a rise of 3.2%.
On the other hand, the consensus estimate for performance fees of $9.6 million indicates a decline of 8.6%.
Management expects money market fee waivers to hurt top-line growth to some extent.
On the cost front, while Invesco’s cost-saving initiatives are likely to have boosted its efficiency, the steady rise in compensation and marketing costs is expected to have had an adverse impact on the overall expense level in the third quarter. Also, the company is expected to have incurred restructuring charges related to its cost-saving program.
Management expects operating expenses to increase modestly on a sequential basis on the assumption that there is no change in markets and foreign exchange levels. Also, a modest rise in marketing-related expenses is expected on seasonality.
What Our Model Predicts
Our proven model does not conclusively predict an earnings beat for Invesco this time around. This is because it does not have 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 0.00%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Asset Managers That Warrant a Look
Here are few asset management stocks that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around
The Earnings ESP for Ameriprise Financial, Inc. (AMP - Free Report) is +1.10% and it carries a Zacks Rank #2 (Buy) at present. The company is slated to report quarterly numbers on Oct 26.
Affiliated Managers Group, Inc. (AMG - Free Report) is scheduled to release earnings on Nov 1. The company, which carries a Zacks Rank #3 at present, has an Earnings ESP of +0.46%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
KKR & Co. Inc. (KKR - Free Report) is scheduled to release earnings on Nov 2. The company currently carries a Zacks Rank #2 and has an Earnings ESP of +1.34%.