Invesco stock reaffirms Buy rating after AUM beat

On Wednesday, TD Cowen analysts maintained their Buy rating on Invesco (NYSE:IVZ) stock, highlighting the company's stronger-than-expected asset under management (AUM) figures. With a market capitalization of $7.6 billion, Invesco appears undervalued according to InvestingPro Fair Value analysis, which aligns with the positive analyst outlook.

Invesco reported an AUM of $1.846 trillion as of December 31, which, despite a 0.60% month-over-month decline, was approximately 0.60% higher than TD Cowen's model projections. This outperformance was attributed to robust inflows in both Long-Term and Global Liquidity assets.

The company reported $12.6 billion in Long-Term inflows, translating to an annualized organic growth rate (AOGR) of around 11%, significantly surpassing the estimated 3.4%. For the fourth quarter, Long-Term inflows reached $25.7 billion, or roughly 8% AOGR.

InvestingPro data reveals that Invesco maintains a strong 4.95% dividend yield and has maintained dividend payments for 18 consecutive years, demonstrating consistent shareholder returns despite market fluctuations. These inflows were broadly distributed across various asset classes, with ETFs, Asia-Pacific (APAC), and Equity segments notably exceeding expectations.

TD Cowen suggests that the volume of these inflows may have a mixed impact on fee rates. However, the magnitude of the inflows is expected to positively influence Invesco's revenue and adjusted operating income outlooks. Invesco's stock performance was positively noted on January 14, following the announcement of the AUM and inflow figures, which outperformed the broader market.

The analysts' commentary underscores Invesco's success in comparison to other traditional asset managers, who generally fell short of forecasts due to weaker flows. Invesco, along with APAM, stood out with the best updates, while TROW and BEN showed better underlying trends than their reported figures suggested. Conversely, AB and VRTS did not meet expectations.

TD Cowen anticipates a constructive update from Invesco with the release of their fourth-quarter earnings, supported by the strong AUM and flow figures. According to InvestingPro, the company's next earnings report is scheduled for January 28, with four analysts recently revising their earnings estimates upward. For deeper insights into Invesco's financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

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