Invesco (IVZ) AI Stock Analysis

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Invesco

(NYSE:IVZ)

71Outperform

Invesco is on a positive trajectory with strong financial performance and attractive valuation. Key strengths include robust net inflows and improved operating margins. Challenges such as revenue volatility and specific product outflows need monitoring. Technical indicators are bearish but suggest a potential rebound, contributing to a balanced outlook.

Positive Factors

Financial Performance

Adjusted EPS of $0.52 exceeded the estimate of $0.46 and consensus of $0.47.

Profit Growth

Operating leverage and capital management are expected to enhance IVZ's profit growth trajectory.

Revenue Growth

Revenue of $1.719B exceeded the estimate of $1.683B and $1.690B consensus.

Negative Factors

AUM Pressure

AUM pressure and flow risk likely overshadow the February results.

Fee Rate Compression

The ongoing mix shifts toward lower-fee products suggest more compression for revenue growth.

Fee Rate Decline

IVZ's fee rate is expected to continue declining due to a high composition of inflows into low-fee products.

Invesco (IVZ) vs. S&P 500 (SPY)

Market Cap

$5.74B

Dividend Yield6.4%

Average Volume (3M)5.84M

Price to Earnings (P/E)10.9

Beta (1Y)1.34

Revenue Growth3.97%

EPS GrowthN/A

CountryUS

Employees8,508

SectorFinancial

Sector Strength80

IndustryAsset Management

Share Statistics

EPS (TTM)1.18

Shares Outstanding447,836,400

10 Day Avg. Volume5,925,219

30 Day Avg. Volume5,836,688

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.13

Price to Cash Flow (P/CF)5.40

P/FCF Ratio5.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$19.11

Price Target Upside49.18% Upside

Rating ConsensusHold

Number of Analyst Covering14

Invesco Business Overview & Revenue Model

Company DescriptionInvesco Ltd. is a publicly owned investment manager. The firm provides its services to retail clients, institutional clients, high-net worth clients, public entities, corporations, unions, non-profit organizations, endowments, foundations, pension funds, financial institutions, and sovereign wealth funds. It manages separate client-focused equity and fixed income portfolios. The firm also launches equity, fixed income, commodity, multi-asset, and balanced mutual funds for its clients. It launches equity, fixed income, multi-asset, and balanced exchange-traded funds. The firm also launches and manages private funds. It invests in the public equity and fixed income markets across the globe. The firm also invests in alternative markets, such as commodities and currencies. For the equity portion of its portfolio, it invests in growth and value stocks of large-cap, mid-cap, and small-cap companies. For the fixed income portion of its portfolio, the firm invests in convertibles, government bonds, municipal bonds, treasury securities, and cash. It also invests in short term and intermediate term bonds, investment grade and high yield bonds, taxable and tax-free bonds, senior secured loans, and structured securities such as asset-backed securities, mortgage-backed securities, and commercial mortgage-backed securities. The firm employs absolute return, global macro, and long/short strategies. It employs quantitative analysis to make its investments. The firm was formerly known as Invesco Plc, AMVESCAP plc, Amvesco plc, Invesco PLC, Invesco MIM, and H. Lotery & Co. Ltd. Invesco Ltd. was founded in December 1935 and is based in Atlanta, Georgia with an additional office in Hamilton, Bermuda.

How the Company Makes MoneyInvesco makes money primarily through management fees charged on its assets under management (AUM). These fees are typically calculated as a percentage of the AUM and vary depending on the type of investment product and market conditions. The company also earns performance fees, which are additional charges based on the investment returns above a certain benchmark. Invesco's revenue streams are further diversified by its product offerings, including mutual funds, ETFs, and other investment vehicles. Significant partnerships with financial advisors and institutional clients enhance its distribution network, contributing to the growth of assets under management and, consequently, its earnings. Additionally, Invesco leverages its global presence to tap into various markets, enhancing its revenue potential through geographic diversification.

Invesco Financial Statement Overview

Summary

Invesco shows resilience with a return to positive net income in 2024, strong cash flow generation, and no debt. However, challenges include revenue volatility and asset decline, requiring careful management for sustained growth.

Income Statement

Positive

Invesco demonstrated a solid income statement performance with a significant turnaround in net income, going from a loss in 2023 to a positive net income in 2024. The gross profit margin is strong as gross profit equals total revenue, indicating no cost of goods sold. Revenue growth is moderate, with a 6.13% increase from 2023 to 2024. EBIT and EBITDA margins are stable, suggesting consistent operational efficiency. However, the decline in total revenue from 2021 to 2023 indicates potential revenue volatility challenges.

Balance Sheet

Positive

The balance sheet of Invesco shows a healthy equity position with no total debt in 2024, marking a significant improvement from previous years. The equity ratio stands strong at 53.89%, indicating a solid financial foundation. However, the decline in total assets from 2020 to 2024 and fluctuating stockholder's equity pose potential long-term challenges.

Cash Flow

Positive

Cash flow analysis reveals robust free cash flow generation with a stable operating cash flow. The free cash flow growth rate from 2023 to 2024 is commendable, contributing to financial flexibility. The operating cash flow to net income ratio is nearly 1, showcasing efficient conversion of income to cash. Despite the positive cash flow position, the decline in cash and short-term investments suggests a need for prudent liquidity management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
6.07B	5.72B	6.05B	6.89B	6.15B
	Gross Profit
6.07B	2.01B	4.32B	4.98B	4.34B
	EBIT
832.10M	835.70M	1.32B	2.53B	1.39B
	EBITDA
1.24B	1.02B	1.32B	1.93B	1.59B
	Net Income Common Stockholders
774.80M	-96.90M	920.70M	1.63B	761.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.50B	1.93B	1.43B	2.15B	1.71B
	Total Assets
27.01B	28.93B	29.76B	32.69B	36.50B
	Total Debt
7.55B	9.04B	8.08B	9.42B	8.80B
	Net Debt
6.05B	7.11B	6.64B	7.27B	7.09B
	Total Liabilities
11.34B	13.02B	12.91B	16.01B	21.48B
	Stockholders Equity
14.56B	14.60B	15.21B	15.50B	14.36B
Cash Flow		Free Cash Flow
1.12B	1.14B	503.30M	969.30M	1.12B
	Operating Cash Flow
1.19B	1.30B	696.20M	1.08B	1.23B
	Investing Cash Flow
68.40M	-244.30M	-368.60M	-847.90M	-865.10M
	Financing Cash Flow
-1.66B	-585.40M	-966.90M	117.30M	-285.90M

Invesco Technical Analysis

Technical Analysis Sentiment

Negative

Last Price12.81

Price Trends

50DMA

16.77

Negative

100DMA

17.09

Negative

200DMA

16.66

Negative

Market Momentum

MACD

-0.43

Negative

RSI

38.21

Neutral

STOCH

20.69

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IVZ, the sentiment is Negative. The current price of 12.81 is below the 20-day moving average (MA) of 15.18, below the 50-day MA of 16.77, and below the 200-day MA of 16.66, indicating a bearish trend. The MACD of -0.43 indicates Negative momentum. The RSI at 38.21 is Neutral, neither overbought nor oversold. The STOCH value of 20.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IVZ.

Invesco Risk Analysis

Invesco disclosed 43 risk factors in its most recent earnings report. Invesco reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Invesco Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AB	80 Outperform	$4.00B	9.75	20.63%	9.01%	―	58.52%
JHG	74 Outperform	$4.76B	11.79	8.74%	5.17%	18.85%	7.96%
IVZ	71 Outperform	$5.74B	10.88	5.31%	6.40%	3.97%	―
STT	66 Neutral	$22.00B	9.28	10.93%	3.80%	20.53%	49.80%
BX	65 Neutral	$152.38B	34.53	36.95%	3.16%	21.25%	97.42%
Sector *	63 Neutral	$12.86B	9.19	9.16%	4.78%	16.31%	-8.97%
AMG	63 Neutral	$4.35B	9.85	14.75%	0.03%	-6.77%	-14.55%

* Financial Sector Average

Performance Comparison

IVZ

Invesco

12.71

-3.41

-21.15%

AMG

Affiliated Managers

145.55

-22.72

-13.50%

AllianceBernstein

36.17

4.29

13.46%

STT

State Street

76.30

2.49

3.37%

Blackstone Group

124.65

-1.33

-1.06%

JHG

Janus Henderson Group

29.68

-1.93

-6.11%

Invesco Earnings Call Summary

Earnings Call Date: Jan 28, 2025 | % Change Since: -27.01% | Next Earnings Date: Apr 22, 2025

Earnings Call Sentiment Positive

Invesco demonstrated strong financial performance in 2024 with record inflows, improved operating margins, and growth in key markets like Asia-Pacific. However, challenges remain with outflows in specific product areas and ongoing implementation costs for the Alpha platform.

Highlights

Strong Long-term Net Inflows

Invesco achieved strong long-term net inflows of $65 billion, representing a 5% organic growth rate in 2024.

Increased Operating Income and Margins

Operating income increased to $1.4 billion with an improved operating margin of over 31% for the year and 34% for the fourth quarter.

ETF and Index Platform Growth

The ETF and Index platforms experienced organic long-term flows of $30 billion, marking a 25% annualized organic growth rate.

Growth in Asia-Pacific

The Asia-Pacific region generated 10% organic growth, marking its best year since 2021, with positive net long-term inflows of $3.5 billion.

Balance Sheet Strengthening

Invesco ended the year with a net cash position of nearly $100 million and reduced debt, with a leverage ratio of 0.25 excluding preferred stock.

Lowlights

Stable Value Product Outflows

There were modest net long-term outflows in fundamental fixed income, primarily driven by stable value products due to the current rate environment.

Continued Pressure on Fundamental Equity Flows

Fundamental equity flows remain below long-term expectations, with net outflows of around $2 billion per quarter.

Implementation Costs for Alpha Platform

Alpha platform implementation costs are expected to continue at $10 million to $15 million per quarter through 2025.

Company Guidance

During Invesco's fourth quarter earnings call for fiscal year 2024, the company reported significant progress on key financial metrics. The firm achieved long-term net inflows of $65 billion, representing a 5% organic growth rate, and increased operating income to $1.4 billion. Operating leverage improved by over 100 basis points, with operating margins reaching 31% for the year and 34% for the fourth quarter. Invesco's ETF and index platforms generated $30 billion in organic long-term flows, a 25% annualized growth rate. Geographically, net long-term flows remained positive across all regions, with Asia-Pacific achieving 10% organic growth. The firm ended the year with nearly $100 million in net cash, having returned 54% of earnings to shareholders through buybacks and dividends. Additionally, the company reduced debt and improved operating leverage, while maintaining a focus on strengthening its balance sheet.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.