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Ameriprise (AMP) Up 25.8% Since Last Earnings Report: Can It Continue?

Zacks Equity Research

A month has gone by since the last earnings report for Ameriprise Financial Services (AMP). Shares have added about 25.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Ameriprise due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Ameriprise Beats Q1 Earnings & Revenue Estimates

Ameriprise Financial’s first-quarter 2020 adjusted operating earnings per share of $5.41 comfortably beat the Zacks Consensus Estimate of $3.88. Also, the figure was 46% higher than the year-ago quarter.

The results reflect an improvement in adjusted revenues. However, decline in AUM and assets under administration (AUA) balance, as well as an increase in expenses were headwinds.

After taking into consideration several significant items, net income was $2.03 billion or $15.88 per share, up significantly from $395 million or $2.82 per share in the prior-year quarter.

Revenues Down, Expenses Up

Net revenues (on a GAAP basis) were $3 billion, down 4% year over year. The figure, however, beat the Zacks Consensus Estimate of $2.87 billion. On an operating basis, total adjusted net revenues (excluding Auto & Home) were $2.95 billion, up 4% year over year.

Adjusted quarterly operating expenses (excluding Auto & Home) were $2.30 billion, increasing 4% from the prior-year quarter.

AUM & AUA Improve

As of Mar 31, 2020, total AUM and AUA was $839.1 billion, down 6% year over year.

Share Repurchase Update

In the reported quarter, Ameriprise repurchased shares worth $386 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

At this time, Ameriprise has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ameriprise has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.



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