Invesco stock rating upgraded by TD Cowen on QQQ migration benefits

Investing.com - TD Cowen upgraded Invesco (NYSE:IVZ) from Hold to Buy and raised its price target to $25.00 from $17.50 on Monday. The stock has shown remarkable momentum, gaining nearly 15% in the past week and currently trading near its 52-week high of $20.05. According to InvestingPro data, nine analysts have recently revised their earnings estimates upward for the upcoming period.

The upgrade follows Invesco’s July 18 announcement that it plans to migrate its QQQ fund from a Unit Investment Trust structure to an open-end management company, while maintaining its ETF status.

TD Cowen cited several benefits from this structural change, including enhanced fund flows and an improved overall fee rate that better aligns flows with revenues.

The firm also noted the change would be accretive to Invesco’s margins and could generate approximately $100 million per year in profits.

These factors combined are expected to expand Invesco’s multiple, according to TD Cowen, which raised its 2026 earnings estimate by more than 10%.

In other recent news, Invesco Ltd . reported its assets under management reached $2 trillion as of June 30, marking a 3% increase from the previous month. The increase was driven by net long-term inflows and positive market returns. Additionally, Invesco is seeking to reclassify its QQQ ETF, which could potentially add $140 million in incremental revenues, according to Barclays (LON:BARC). This reclassification would allow Invesco to earn a management fee from the ETF, potentially boosting earnings by about 10%. Barclays maintained its Equalweight rating on Invesco, while Wells Fargo (NYSE:WFC) upgraded the company’s stock rating from Underweight to Equal Weight, citing an improved risk profile and margin expansion potential. In other developments, Invesco held its Annual General Meeting, where shareholders elected the Board of Directors and approved executive compensation and the appointment of PricewaterhouseCoopers as the auditor. The company also announced plans to utilize platforms from State Street (NYSE:STT) and Blackrock (NYSE:BLK) to optimize its investment operations. Meanwhile, Thomas M. Finke, a non-executive director at Invesco, has joined the board of Venu Holding Corporation.

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