Goldman Sachs Reiterates Neutral Rating on Invesco (IVZ)

Goldman Sachs analyst Alexander Blostein reiterated a Neutral rating and $19.00 price target on Invesco (NYSE: IVZ).

The analyst comments "IVZ reported adj. EPS of $0.52, a healthy 11% beat relative to the Street (Visible Alpha Consensus Data) of $0.47 driven by better performance fees, well-managed expenses (which partially benefited from a $13mn insurance recovery), and a slightly lower (80bps) tax rate. Operating income was 8% higher than Consensus expectations of $365mn, with the 33.7% operating margin >200bps higher than the Street. Normalizing for the $13.1mn insurance reimbursement in G&A, operating income still beat by ~4% and IVZ's operating margin would have been 32.6%, or 100bps better than Street expectations. Stronger than expected performance fees vs. the Street drove a 1% net revenue beat, more than offsetting management fee pressures. The net management fee rate of 24.6bps was down from 25.3bps q/q and was slightly below Consensus - though likely not as bad as feared and inline with GSe. Management tightened fee rate ranges by product, which result in about 1bps blended fee rate decline relative to the targeted ranges provided last quarter. Long-term inflows of $26bn excluding non-management fee generating AUM (known from the monthly releases) were driven by ETF and Index flows of +$30bn as the mix of flows continues to skew toward passive. Overall, we are encouraged by IVZ's improvement expense basis and while management fee rate is likely to continue to blend lower, we think this risk is well understood at this point and could be potentially outrun with strength in flows - pointing to flattish or slightly positive organic base fee growth."

For an analyst ratings summary and ratings history on Invesco click here. For more ratings news on Invesco click here.

Shares of Invesco closed at $17.75 yesterday.

You May Also Be Interested In