CFRA raises Ameriprise Financial target to $645, maintains Buy

On Thursday, CFRA analyst Catherine Seifert increased the price target for Ameriprise Financial (NYSE:AMP) stock to $645 from $575 while reiterating a Buy rating. Seifert’s optimism is based on the company’s strong fourth-quarter earnings, which surpassed both CFRA’s and the consensus estimates. The stock, currently trading near its 52-week high of $577.89, has demonstrated remarkable strength with a 34% gain over the past six months. According to InvestingPro analysis, the company maintains a "GREAT" financial health score of 3.31 out of 5.

Ameriprise Financial reported a fourth-quarter 2024 earnings per share (EPS) of $9.36, significantly higher than the $7.20 reported in the same quarter the previous year, and above the expected $9.05. This surge in EPS was attributed to an 18% increase in Advice & Wealth Management revenues and stable margins, despite some mixed fund flow trends. Additionally, the Asset Management segment saw a 10% rise in revenue and a 29% jump in profit, bolstered by better fund flows and cost savings. Retirement revenues also grew by 5%, maintaining stable margins.

The analyst highlighted that Ameriprise Financial’s full-year 2024 EPS came in at $34.35, outperforming CFRA’s estimate of $34.07. The upward revision of the price target reflects a valuation of 15.3 times the 2026 operating EPS estimate of $42.20, which was raised by $0.10, and 16.6 times the 2025 EPS estimate of $38.75, increased by $0.50. These multiples compare to Ameriprise Financial’s one-year average forward multiple of 13 times and a peer average of 17 times.

Seifert anticipates continued favorable fund flow trends and a moderate level of asset appreciation in 2025, which she believes will lead to operating revenue growth of 7% to 12%, outpacing many of the company’s peers. With the stock currently trading at 13.6 times the 2026 EPS estimate and at 14.8 times the 2025 EPS estimate, Seifert considers Ameriprise Financial’s shares, which yield 1%, to be undervalued in comparison to its peers.

In other recent news, Ameriprise Financial reported a 22% increase in assets under management and administration, reaching $1.5 trillion, and an 11% rise in adjusted operating net revenue, totaling $4.4 billion. The company’s earnings per share grew by 17%, excluding severance expenses, and return on equity was robust at 50.7%, marking an increase from the previous year. Analyst firm Morgan Stanley (NYSE:MS) adjusted its outlook on Ameriprise Financial, raising the price target to $509 from $502, while maintaining an Equalweight rating on the company’s stock. This followed a revision of future earnings per share (EPS) estimates after the company’s third-quarter 2024 earnings.

The 2024 fourth-quarter adjusted EPS was decreased by 7 cents, a 0.8% reduction, to a new estimate of $9.66 due to a higher expected tax rate. The 2025 EPS forecast was slightly lowered by 0.2% to $39.58, factoring in anticipated elevated expenses. However, the 2026 EPS projection was raised by 1.3% to $42.42, based on the anticipation of better adjusted net revenues.

CFRA, another analyst firm, raised the price target for Ameriprise Financial to $575, maintaining a Buy rating on the stock. This adjustment reflects the firm’s strong financial results and growth prospects. In line with these recent developments, Ameriprise Financial plans to introduce new savings and lending products and aims to return 80% of capital to shareholders in 2024, with similar expectations for 2025.

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