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What's in the Cards for Invesco (IVZ) This Earnings Season?

Zacks Equity Research

Invesco IVZ is slated to announce third-quarter 2019 results on Oct 23, before market open. While revenues for the to-be-reported quarter are expected to have grown year over year, earnings are likely to have declined.

In the last reported quarter, adjusted earnings surpassed the Zacks Consensus Estimate. Results reflected improvement in assets under management (AUM) and rise in revenues, driven by the OppenheimerFunds buyout.

Invesco has a decent earnings surprise history. The company’s earnings have surpassed the consensus estimate in two of the trailing four quarters.

Nonetheless, given the tough operating backdrop in the third quarter, analysts are bearish on the stock. The Zacks Consensus Estimate for earnings of 57 cents has moved 3.4% lower over the past 30 days. The figure indicates a decline of 13.6% from the year-ago reported number.

Notably, the consensus estimate for sales is pegged at $1.76 billion, which suggests 31.1% jump.

Now, let’s check the factors that are likely to have influenced Invesco’s third-quarter earnings.

Per the monthly metrics data published by Invesco, preliminary total AUM as of Sep 30, 2019, was $1,184.4 billion, down 1.1% from Jun 30, 2019 level. The fall seems to be majorly due to net outflows.

The Zacks Consensus Estimate for average AUM is pegged at $1,200 billion, indicating a rise of 13.6% from the prior-quarter reported figure. Hence, performance fees and investment management fees are likely to have recorded soft growth in the third quarter.

Further, the consensus estimate for service and distribution fees is $384 million, up 30.6% sequentially.

On the cost front, Invesco’s initiatives to manage costs and improve efficiency are likely to have led to expense savings in the to-be-reported quarter. However, the company’s inorganic growth strategy and investments in franchise might have resulted in higher operating expenses.

Here’s what our quantitative model predicts:

The chances of Invesco beating the Zacks Consensus Estimate in the third quarter are low. 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 -0.15%.

Zacks Rank: The company currently has a Zacks Rank #3.

Invesco Ltd. Price and EPS Surprise

 

Invesco Ltd. Price and EPS Surprise

 

Invesco Ltd. price-eps-surprise | Invesco Ltd. Quote

Stocks to Consider

Here are some finance stocks that you may want to consider as these have the right combination of elements to post an earnings beat this quarter.

Blackstone BX is slated to release results on Oct 23. It has an Earnings ESP of +3.70% and currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Huntington Bancshares Incorporated HBAN is slated to release results on Oct 24. It presently has an Earnings ESP of +0.60% and a Zacks Rank #3.

Cullen/Frost Bankers, Inc. CFR has an Earnings ESP of +0.07% and carries a Zacks Rank #3 at present. The company is scheduled to release results on Oct 24.

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