Analyst Craig Siegenthaler of Bank of America Securities reiterated a Hold rating on Invesco (IVZ – Research Report), with a price target of $19.00.
Craig Siegenthaler has given his Hold rating due to a combination of factors impacting Invesco’s performance and outlook. Invesco reported positive long-term net inflows, indicating solid organic growth, yet this was balanced by a decline in fee rates. Despite the positive trend in net flows expected to continue, primarily driven by growth in ETFs, fixed income, APAC, and private markets, the fee rate headwinds are anticipated to persist, albeit at a slower pace. Additionally, the adjusted EPS for the first quarter of 2024 fell short of both the estimate and consensus, with misses attributed to both operating and non-operating income, influencing the analyst’s cautious stance.
Furthermore, while Siegenthaler sees potential for operating leverage and share buybacks in the latter half of the forecast period, his outlook includes modest adjustments to earnings projections, with a slight decrease for 2024 offset by increased expectations for 2025 and 2026. This adjustment is primarily due to an anticipated improvement in fee rates. The price objective remains unchanged at $19, suggesting a significant total return potential, but current macroeconomic headwinds, particularly in the real estate sector, and a fee rate decline driven by inflows into lower-fee products, contribute to the rationale for maintaining a Neutral or Hold rating on Invesco’s stock.
Siegenthaler covers the Financial sector, focusing on stocks such as Ameriprise Financial, Intercontinental Exchange, and LPL Financial. According to TipRanks, Siegenthaler has an average return of 13.1% and a 64.59% success rate on recommended stocks.
In another report released yesterday, KBW also downgraded the stock to a Hold with a $17.00 price target.
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Invesco (IVZ) Company Description:
Invesco Ltd. engages as an independent global investment management firm. It operates through Investment Management segment. The firm offers a range of single-country, regional, and global capabilities across major equity, fixed income and alternative asset classes, delivered through a diverse set of investment vehicles. The company was founded in December 1935 and is headquartered in Atlanta, GA.
