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Barclays Sees 27% Upside And Modestly Positive Q3 For Invesco

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Barclays Sees 27% Upside And Modestly Positive Q3 For Invesco

Shares of Invesco Ltd. (NYSE: IVZ) present a "compelling upside" at current levels, according to a note from Barclays.

Despite having an Overweight rating on the stock, the brokerage cut its price target by $1 to $34, representing an upside potential of 27 percent.

"Our 2Q16 EPS remains unchanged but our 2017 EPS falls to $2.74 from $2.82," analyst Kenneth Hill wrote in a note.

Invesco reported total June assets under management (AUM) of $779.6 billion, down 1.5 percent month-over-month and below Barclays' $793.5 billion estimate. The analyst estimates long-term flows in line with the pre-announced $1 billion of inflows.

Related Link: Has Invesco's Hedge Against The Pound Kept It Protected From Brexit?

Based on the AUM release, the analyst places returns inclusive of FX at -0.8 percent, or less than a -$7 billion impact on AUM in June and +$3 billion for the quarter, which compares to Barclays prior estimate of +$12 billion for the second quarter.

"We remain cognizant of the headwinds, but constructive on the outlook. With 3Q off to an uncertain, but generally more positive start, we believe flows will hold up at IVZ," Hill continued.

That said, the analyst noted FX is likely to remain a headwind, although a headwind that has 75 percent of its impact offset by put options on the GBP.

At time of writing, shares of Invesco were down 0.80 percent to $26.65.

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Latest Ratings for IVZ

DateFirmActionFromTo
Apr 2021Credit SuisseMaintainsNeutral
Apr 2021Morgan StanleyMaintainsEqual-Weight
Apr 2021Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for IVZ
View the Latest Analyst Ratings

 

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