Barclays Sees 27% Upside In Invesco Shares

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?

"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.

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.

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.