Invesco stock gains as Barclays sees QQQ reclassification boosting revenue

Investing.com - Invesco (NYSE:IVZ), the $8.8 billion asset management firm trading near its 52-week high of $19.55, is seeking to reclassify its QQQ ETF from a unit investment trust to an open-ended management company, according to an SEC filing.

The structural change would allow Invesco to serve as the fund’s investment advisor and earn a management fee from the popular ETF for the first time, Barclays (LON:BARC) noted in its analysis of the filing.

Barclays estimates the reclassification could add approximately $140 million in incremental revenues based on current QQQ assets under management, representing about a 4 basis point net management fee.

The additional revenue would come at "very high, if not 100%, incremental margin," potentially boosting Invesco’s earnings by approximately 10%, according to Barclays’ analysis.

Barclays maintained its Equalweight rating and $17.00 price target on Invesco stock, while noting the change would add a management fee to "one of Invesco’s fastest-growing assets."

In other recent news, Invesco reported strong financial results for Q1 2025, surpassing analysts’ expectations. The company posted an earnings per share (EPS) of $0.44, exceeding the forecast of $0.40, and achieved revenue of $1.53 billion, which was $420 million above projections. This performance reflects a 5% year-over-year increase in net revenues and an 18% rise in adjusted operating income. Additionally, Invesco’s assets under management (AUM) reached $2 trillion as of June 30, marking a 3% increase from the previous month, driven by net long-term inflows and positive market returns.

In terms of corporate governance, Invesco’s shareholders recently elected the company’s Board of Directors, approved executive compensation, and appointed PricewaterhouseCoopers LLP as the independent auditor for the fiscal year. Furthermore, Invesco announced a strategic decision to utilize platforms from State Street (NYSE:STT) and Blackrock (NYSE:BLK) for its investment needs, aiming to optimize outcomes for its clients. Invesco’s stock received an upgrade from Wells Fargo (NYSE:WFC), moving from Underweight to Equal Weight, due to an improved risk profile and better revenue outlook.

Additionally, Thomas Finke, a seasoned financial leader, joined VENU’s Board of Directors while also serving as a non-executive director for Invesco. These developments indicate strategic movements within Invesco to maintain its market position and enhance operational efficiency.

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