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Investing.com - BofA Securities raised its price target on Invesco (NYSE:IVZ) to $23.00 from $17.00 while maintaining a Neutral rating on the stock. The company’s shares, currently trading at $21.44, have shown remarkable momentum with a 25.89% gain in the past week. According to InvestingPro analysis, the stock is currently trading near its Fair Value, with technical indicators suggesting overbought conditions.
The price target increase reflects the potential impact of the upcoming QQQ fund reclassification, which BofA Securities views as a clear catalyst that could lift earnings and improve organic growth visibility for the asset manager. With a market capitalization of $9.57 billion and a P/E ratio of 17.1x, Invesco continues to maintain its position as a significant player in the asset management industry. InvestingPro subscribers can access 12 additional key insights about Invesco’s financial health and market position.
On October 24, shareholders of the QQQ exchange-traded fund will vote on converting the fund from a unit investment trust (UIT) to an open-end ETF structure, a change that could unlock approximately 4 basis points of net revenue, amounting to $150 million for Invesco.
While the management fee for QQQ would decrease from 20 basis points to 18 basis points under the new structure, Invesco’s net earnings from the fund would increase to 4 basis points from zero, as the current UIT structure directs all 20 basis points to third parties.
Under the proposed open-end ETF structure, investors would pay a slightly lower fee of 18 basis points, with 11-12 basis points going to third-party distributors and 2-3 basis points allocated for marketing under Invesco’s discretion, leaving the company with 4 basis points of net revenue yield.
In other recent news, Invesco reported its second-quarter 2025 earnings, showcasing a significant revenue increase. The company posted $1.51 billion in revenue, surpassing the forecast of $1.1 billion, which represents a 37.27% rise. However, the earnings per share (EPS) were slightly disappointing, coming in at $0.36 compared to the expected $0.40. Invesco also expanded its fixed income lineup by launching two new actively managed ETFs, the Invesco Core Fixed Income ETF and the Invesco Intermediate Municipal ETF. These additions are part of the company’s growing fixed income platform, which now manages over $491 billion globally. Meanwhile, Jefferies maintained its Hold rating on Invesco but raised its price target from $16.00 to $21.00. This adjustment follows the company’s recent financial performance and the announcement of its second-quarter results. Jefferies also made slight upward revisions to Invesco’s earnings per share estimates for 2025 and 2026.
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