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Invesco Ltd. (IVZ), headquartered in Atlanta, Georgia, is an independent investment management company with a market cap of $7 billion. The firm is recognized for its strong portfolio management and innovative strategies, providing a wide array of products that span equities, fixed income, alternatives, and multi-asset classes.
Shares Invesco have significantly underperformed the broader market over the past year. IVZ stock has declined 9.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 15.1%. In 2024 alone, IVZ tumbled 14.1% compared to SPX's 9% return on a YTD basis.
Zooming in, IVZ also trails behind the Financial Select Sector SPDR Fund (XLF), which has returned 17.4% over the past year.
Elevated expenses, a challenging market environment, and high debt levels over the past year have contributed to Invesco's underperformance compared to the broader market.
However, on Jul. 23, Invesco released a robust Q2 earnings report, which led to a 1.9% increase in stock price. The company met revenue estimates and exceeded EPS expectations, primarily due to a decline in adjusted expenses and an increase in assets under management (AUM) driven by decent inflows.
Additionally, IVZ shares rose over 3% on Jul. 10 after the company reported that total AUM, as of June 30, 2024, reached $1.72 trillion, reflecting a 1.7% increase from the previous month and an 11.5% annual rise. The firm’s net long-term inflows stood at $6.5 billion for the month, non-management fee-earning net inflows at $0.2 billion, and money market net outflows hit $1.9 billion.
For the current fiscal year, ending in December 2024, analysts expect IVZ’s EPS to grow 9.3% annually to $1.65 on a diluted basis. The company's earnings surprise history is mixed. It missed the consensus estimate in two of the last four quarters while exceeding on two other occasions.
Among the 15 analysts covering IVZ stock, the consensus rating is a “Hold.” That’s based on two “Strong Buy” ratings, and 13 “Holds.”
This configuration has been consistent over the past months.
On July 25, RBC Capital Markets raised its price target for Invesco to $17 from $16, maintaining a “Sector Perform” rating. This update follows Invesco's fiscal Q2 earnings results and the expectation of share buybacks resuming in Q3.
The mean price target of $17.32 represents a 13% premium to IVZ’s current price levels. The Street-high price target of $20 suggests an upside potential of 30.5%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
