It has been about a month since the last earnings report for Ameriprise Financial Services (AMP). Shares have lost about 0.5% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ameriprise due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Ameriprise Q1 Earnings & Revenues Beat, AUM Rises
Ameriprise’s first-quarter 2019 adjusted operating earnings per share of $3.75 surpassed the Zacks Consensus Estimate of $3.61. Also, the figure came in 2% higher than the year-ago quarter level.
Results benefited from rise in assets under management (AUM) and assets under administration (AUA). However, lower revenues and rise in operating expenses were headwinds.
After taking into consideration several significant items, net income came in at $395 million or $2.82 per share, down from $594 million or $3.91 per share in the prior-year quarter.
GAAP Revenues Down, Costs Up
Net revenues (on a GAAP basis) came in at $3.12 billion in the first quarter, down 1.6% year over year. However, the reported figure beat the Zacks Consensus Estimate of $3.04 billion. On an operating basis, total adjusted net revenues came in at $3.12 billion, up marginally.
Adjusted operating expenses were $2.48 billion, up nearly 1% from the prior-year quarter.
AUM & AUA Improves
As of Mar 31, 2019, total AUM and AUA was $891.18 billion, marginally up year over year. This upside reflected strength in Ameriprise’s advisor client net inflows, partly muted by asset management outflows.
Share Repurchase Update
In the reported quarter, Ameriprise repurchased 2.8 million shares for $355 million.
Effective tax rate is expected to be nearly 16% in 2019.
The company is well poised to return roughly 110% of operating earnings shareholders in 2019 and fund bank capital requirements, while evaluating uses of excess capital.
Distribution fees are expected to improve year over year in 2019.
Pre-tax margin for Asset Management segment is expected to remain under pressure in the quarters ahead.
Management targets 6-8% growth in adjusted operating net revenues. Further, adjusted operating earnings are projected to grow in the range of 12-15%. Adjusted operating return on equity excluding AOCI is anticipated to be 19-23%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
At this time, Ameriprise has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise 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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