Invesco Ltd. Stock Analysis NYSE:IVZ

Invesco Ltd. Stock Analysis NYSE:IVZ

From Trading Overview to Key Performance Metrics: What Investors Need to Know About Invesco's Position in the Market | That's TradingNEWS


Invesco Ltd. Stock Analysis: A Comprehensive Insight

Today's Trading Overview: NYSE:IVZ

As of 1:40 PM on Friday, Sep 8, Invesco Ltd. (IVZ) witnessed its stock price ascend by $0.13, marking a 0.85% increase from its previous closing figure of $15.34. The day's trading range spanned from $15.25 to $15.52. With the day's volume tallying at 1,149,157 shares, it's a notable dip from the average volume of 3,389,201 shares.

Institutional Investor Activities

Several hedge funds and institutional entities have recently modified their holdings in Invesco. For instance, OLD Mission Capital LLC established a new stake in the fourth quarter valued roughly at $26,000. Furthermore, the fourth quarter saw Money Concepts Capital Corp amplify its stake by 150.1%, reaching a valuation of approximately $30,000. Similar moves were observed by EverSource Wealth Advisors LLC and Machina Capital S.A.S., with the former elevating its position by 125.7% and the latter initiating a new stake in the first quarter. A substantial 66.27% of IVZ's stock is held by hedge funds and other institutional investors.

Research Reports and Ratings

Invesco's stock has attracted various ratings from research entities. TheStreet, for instance, downgraded Invesco from a "b-" to a "c+" in their report dated Tuesday, May 30th. Conversely, Morgan Stanley retained an "equal weight" rating, projecting a target price of $17.00 as of Tuesday, July 25th. While BMO Capital Markets commenced its coverage with a "market perform" rating and a target of $21.00, shifted its perspective from "hold" to "sell" on Wednesday, August 30th. Citigroup also chimed in by enhancing their target from $16.00 to $19.00, maintaining a "neutral" stance on Friday, July 14th. Summing up these evaluations, Invesco currently possesses a consensus rating of "Hold" with a consensus price target of $18.45.

Key Performance Metrics

NYSE:IVZ opened at $15.69 on Wednesday. Taking a broader look, its 50-day moving average stands at $16.57, whereas its 200-day moving average stabilizes at $16.37. With a market cap of $7.04 billion, the company exhibits a P/E ratio of 11.12, a PEG of 1.40, and a beta of 1.39. Impressively, the company's stocks have floated between a low of $13.20 and a high of $20.56 in the past year. Additionally, the debt-to-equity ratio comes in at 0.71, paired with a current ratio of 5.15.

Quarterly Earnings Update

Invesco's most recent quarterly earnings were unveiled on Tuesday, July 25th. The asset management entity documented an EPS of $0.31, which unfortunately didn't meet the consensus estimate of $0.40, marking a deviation of ($0.09). The firm's revenues for the quarter touched $1.09 billion, slightly below the forecast of $1.11 billion. Compared to the prior year, Invesco's revenues plunged by 7.1%. Analysts project that for the ongoing fiscal year, Invesco Ltd. will register an EPS of 1.53.

Dividend News

A notable dividend announcement came forth recently. A quarterly dividend was dispensed on Tuesday, September 5th, with stockholders documented on Friday, August 11th receiving a dividend of $0.20. This channels to an annualized dividend of $0.80, yielding 5.10%. It's worth noting that the firm's Dividend Payout Ratio (DPR) stands at 56.74%.

Company Outlook Amid Economic Challenges

Invesco's top line appears to be grappling with macroeconomic challenges. Concerns also arise due to significant amounts of goodwill and intangible assets present in its balance sheet. The recent decline in the company’s earnings growth potential has made analysts skeptical. Over the past 30 days, estimates for IVZ’s current-year earnings have been scaled down by 7.3%. The stock currently is rated as a Zacks Rank #5 (Strong Sell).

Over the past six months, IVZ shares have dwindled by 12.2% compared to the industry's decline of 1.9%. Despite a CAGR of 3.2% from 2017-2022, revenues have witnessed a dip since the latter half of 2020, including a decline in the first six months of 2023.

Invesco's Goodwill and Intangible Assets

Diving into the financial anatomy of Invesco, one can't help but notice the sizeable allocation of its goodwill and intangible assets. On June 30, 2023, these assets stood at a striking $15.8 billion. This isn't just a trivial amount; it accounts for a substantial 53.6% of the firm's total assets.

What this indicates is that a significant portion of the company's value is tied up in non-physical, intangible aspects. These could range from brand recognition, customer relationships, proprietary technology, or other forms of intellectual property. These intangibles can be valuable, especially in a knowledge-based economy, but they also come with their own set of risks. The key question for investors is: Does this high concentration in goodwill and intangible assets pose a risk to the firm's overall financial health?

Total Assets and Liabilities Insight

To get a comprehensive understanding, we need to also examine the total assets and liabilities of the company. As of the same date, Invesco's total assets were pegged at $29.5 billion. On the flip side, total liabilities came in at $17.7 billion. Thus, Invesco boasts a positive net worth or shareholders' equity of $11.8 billion.

These figures are essential because they give us an overview of the company's overall financial standing. A positive net worth is generally a good sign, indicating that the company has more assets than liabilities. Yet, the concentration of these assets in intangibles must be approached with an analytical eye.

Liquidity Position: Current Ratio Examination

For any company, especially one in the financial sector, understanding its liquidity position is paramount. A frequently used metric to gauge this is the current ratio. It's a simple yet powerful tool, measuring a company's ability to cover its short-term liabilities with its short-term assets.

By the latest data available, Invesco's current assets stood at $7.2 billion, while its current liabilities were at $6.5 billion. This gives Invesco a current ratio of 1.11. A ratio above 1 typically suggests that a company can adequately meet its short-term obligations, offering some solace to investors concerned about any immediate liquidity crisis.

Revenue Stream Analysis

A company's revenue streams can offer a plethora of insights. Invesco's most recent report indicates a quarterly revenue of $1.2 billion, a commendable figure by any standard. This revenue is primarily derived from asset management fees, performance fees, service and distribution fees, and foreign exchange income.

Understanding the breakdown of these revenue sources provides an inkling into the company's business model. Asset management fees, being a primary source, underscores the importance of the company's asset under management (AUM) figures.

Stock Performance Overview

A glance at the stock's performance can often mirror the company's health. As of now, Invesco's stock, accessible via the link, provides real-time insights into its trading patterns. Tracking this link can be valuable for potential investors or current shareholders looking to understand market sentiment around NYSE:IVZ.

The Implications of High Intangible Assets

Now, returning to our initial discussion on intangible assets. High intangible assets can sometimes indicate that a company has made significant acquisitions in the past, and the premium paid over the tangible asset value gets reflected as goodwill. However, the challenge with such assets is their susceptibility to impairments. If Invesco determines that the value of its intangibles has decreased, it could lead to significant write-downs, impacting the bottom line.

In the ever-evolving financial landscape, Invesco's substantial intangible assets can be both an asset and a liability. It's a testament to the company's rich intellectual properties and brand strength, but it also signifies potential volatility in future financial statements. Investors must, therefore, tread with caution and be well-informed.

Invesco's Current Standing in the Financial Landscape

Valuation and Market Performance

Invesco (NYSE:IVZ) currently presents an interesting scenario for investors. Its relative valuation compared to the broader market is notably at a significant discount. This has been the case since the onset of 2023, marking a deviation from its usual market tracking. Interestingly, while many market drivers have shown limited range, Invesco's fundamentals seem to lean more towards substantial improvements, especially within the equity space.

However, the horizon for Invesco appears cloudy for the coming 6-12 months, primarily due to ongoing apprehensions about overarching macroeconomic factors. An essential element to note is the bond market's pricing of long-term rates, suggesting that the long-term outlook for equities may not be particularly promising. While the possibility of inflows into fixed income funds can counteract this to some degree, it is anticipated that the banking sector alongside savings deposits will claim a larger share, making the overall passive shift a concerning factor for Invesco's revenue and asset mix.

Q2 Overview and Insights

The Q2 report indicates a minor revenue strain caused by mix effects even with the growth of Assets Under Management (AUMs). One of the evident challenges was the reduction in performance fees, attributable to the lackluster performance of general asset classes. The primary concern is the evident shift towards passive investment, which can lead Invesco into significant mix problems.

There are some indicators suggesting that performance fees might witness an uptick as the 'soft landing' narrative gains traction. However, looming Fed meetings may redirect these expectations. Inflation dynamics, driven in part by situations like China's commodity deflation and the slowing of rent inflation (a significant segment of consumer prices), could present obstacles. There remains a persistent core inflation component driven by vendor-customer dynamics and labor relations that needs to be adequately addressed to pull inflation below the crucial 2% mark.

Being primarily an indexer and quasi-indexer, Invesco's asset management strategies are greatly influenced by factors such as rate scenarios. The definitive arrival of peak rates is still shrouded in uncertainty.

Concerns and Future Projections

The yield curve brings its own set of concerns. With rising expectations around long-term rates, shaped by overarching trends like deglobalization pushing up long-term inflation pressures, there may be changes in savers' and investors' dynamics. The once unchallenged idea of "There Is No Alternative" (TINA) to equities is now being questioned.

Invesco, despite having exposure to fixed income and money market funds, might concede business to banks, especially if a decline in equity performance drives an accelerated shift towards passive strategies.

Invesco also faces certain risk exposures. Fund outflows from segments like direct and indirect real estate, along with their China business, might persist. This would divert more business towards passive funds or external savings options. Real estate concerns are driven by potential recession threats, long-term rate issues, and the ongoing implications of the work-from-home trend. Cumulatively, these areas might constitute more than 10% of AUM.

Valuation Measures and Key Statistics

  • Market Capitalization: $6.88B
  • Enterprise Value: $17.98B
  • Trailing P/E: 10.96
  • Forward P/E: 8.08
  • Price/Sales (ttm): 1.22
  • Enterprise Value/Revenue: 3.13
  • 52-Week Change: -12.74%
  • S&P500 52-Week Change: 9.44%
  • Avg Volume (3 month): 3.91M
  • Shares Outstanding: 448.62M
  • Short Ratio (Aug 14, 2023): 2.67

For real-time stock chart and detailed data, click here.

Key Holders

Among the major institutional shareholders, Vanguard Group Inc, Blackrock Inc., and Trian Fund Management, LP top the list, holding 11.87%, 10.67%, and 7.57% respectively as of Jun 29, 2023.

Invesco Ltd. (NYSE:IVZ) Analysis Conclusion: Comprehensive Review and Forward Outlook

Trading Overview: NYSE:IVZ

Invesco Ltd.'s stock has modestly gained $0.13, representing a 0.85% uplift from its prior closing price of $15.34. This slight surge occurred within a trading window between $15.25 and $15.52. Notably, the day's trading volume is considerably lower than the average, registering at 1,149,157 shares compared to an average of 3,389,201.

Institutional Activities

The institutional landscape for Invesco is seeing dynamic shifts. Firms such as OLD Mission Capital LLC and Machina Capital S.A.S. are either establishing new stakes or modifying their existing positions. What's pivotal is that a significant 66.27% of IVZ’s stock remains under institutional control.

Analysts' Take

Various research firms have provided mixed insights about Invesco. While TheStreet downgraded it from "b-" to "c+", Morgan Stanley and BMO Capital Markets suggested more neutral stances. Overall, the consensus rating lands at "Hold" with a target price of $18.45.

Performance Metrics and Valuations

Invesco's performance metrics show a stock hovering near its 200-day moving average. With a market cap of $7.04 billion and a P/E ratio of 11.12, the valuation appears relatively conservative. However, investors must note its 52-week range which suggests higher volatility.

Earnings Insights

Invesco's recent quarterly earnings came under the spotlight, with an EPS of $0.31, missing the expected $0.40. The firm's revenue for this quarter was slightly under forecast, and year-on-year, a dip of 7.1% was recorded. The full-year projection for EPS stands at 1.53.

Dividend Status

The company has maintained a dividend yield of 5.10% with its recent quarterly dividend being $0.20, leading to an annualized payout of $0.80. Its Dividend Payout Ratio (DPR) is positioned at 56.74%.

Financial Health: Intangible Assets & Liquidity

A deep dive into Invesco's financials uncovers a heavy skew towards goodwill and intangible assets, which account for a whopping 53.6% of total assets. While these intangible assets can represent strength in intellectual properties, they also hint at potential volatility. As of June 30, 2023, the firm's total assets and liabilities stood at $29.5 billion and $17.7 billion respectively. The current ratio, an indicator of short-term financial health, stands healthy at 1.11.

Revenue Streams

Invesco’s primary revenue, clocking at a quarterly $1.2 billion, is derived from asset management fees, performance fees, and service and distribution fees.

Stock Performance

For those seeking real-time insights into Invesco's stock patterns, this link provides valuable metrics. However, historical performance over the past six months reveals a 12.2% decline for IVZ against an industry dip of just 1.9%.

Market Landscape and Concerns

Entering 2023, Invesco's valuation has significantly diverged from the broader market. The next 6-12 months seem cloudy due to macroeconomic concerns. Additionally, with the shift towards passive investment strategies, Invesco might see revenue mix challenges, especially considering its indexer and quasi-indexer approach.

Valuation Statistics

Valuation metrics, such as a trailing P/E of 10.96 and a forward P/E of 8.08, suggest a conservative market stance on Invesco. The company's market capitalization stands at $6.88 billion, and its enterprise value reaches $17.98 billion.

Key Shareholders

Institutional dominance is evident in Invesco's stock, with major stakeholders like Vanguard Group Inc, Blackrock Inc., and Trian Fund Management, LP holding significant percentages of the company's shares.

In Conclusion

Invesco presents an intricate investment proposition. With a dominant position in intangible assets, there is potential risk but also value in intellectual properties. While the short-term outlook is somewhat unclear due to market apprehensions, long-term investors might find value, especially when considering its current undervaluation relative to the broader market. The consensus leans towards a "Hold", but investors should continually assess macroeconomic shifts and company fundamentals before making any decisions.
That's TradingNEWS

By Clicking on "Accept", you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.