Invesco (IVZ) Down 5.5% Since Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Invesco plc (NYSE:IVZ) . Shares have lost about 5.5% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Invesco Beats Q3 Earnings as Revenues and AUM Rise

Invesco reported third-quarter 2017 adjusted earnings of 71 cents per share, outpacing the Zacks Consensus Estimate of 66 cents. Also, the bottom line came in 18.3% higher than the prior-year quarter.

Results were primarily supported by higher revenues and long-term net inflows. Further, the company reported a rise in assets under management. However, increase in operating expenses acted as a headwind.

On a GAAP basis, net income attributable to common shareholders came in at $267.5 million or 65 cents per share, up from $241.2 million or 58 cents per share a year ago.

Rise in Revenues More Than Offsets Higher Costs

GAAP operating revenues for the quarter were $1.34 billion, up 11.3% year over year. The figure was marginally above the Zacks Consensus Estimate of $1.33 billion. Adjusted net revenues increased 14.3% year over year to $976.6 million.

Adjusted operating expenses were $579.2 million, up 12.4% from the prior-year quarter. The rise was due to an increase in all expense components.

Adjusted operating margin for the quarter was 40.7% compared with 39.7% a year ago.

Strong AUM

As of Sep 30, 2017, AUM grew 11.9% year over year to $917.5 billion. Average AUM for the reported quarter totaled $890.8 billion, up 9.4% from the year-ago quarter. Further, the reported quarter witnessed long-term net inflows of $6.3 billion.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. There have been two revisions higher for the current quarter compared to one lower.

VGM Scores

At this time, the stock has an average Growth Score of C, though it is doing a lot better on the momentum front with a B. The stock was also allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for value and momentum investors than growth investors.

Outlook

Estimates have been trending upward for the stock and the magnitude of these revisions also looks promising. It comes with little surprise that the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.