In a report released yesterday, Michael Brown from Wells Fargo maintained a Sell rating on Invesco (IVZ – Research Report), with a price target of $14.50.
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Michael Brown has given his Sell rating due to a combination of factors affecting Invesco’s financial performance. Despite a modest 1.2% organic growth in April, the firm’s asset under management (AUM) faced challenges from market volatility and a shift towards low- and no-fee products, which could impact future revenue growth. The company’s net revenue yield showed some resilience, but the persistent trend towards lower-fee ETFs suggests continued pressure on fee rates.
Additionally, the deterioration in U.S. mutual fund net outflows, which worsened amid market volatility, poses a significant concern for Invesco. While the firm is less affected by this than some competitors, the decrease in mutual fund AUM as a percentage of fee-earning assets highlights a negative trend. Furthermore, the decline in high-fee Private Markets AUM adds to the challenges, despite the absence of anti-U.S. sentiment from international clients. These factors collectively underpin Brown’s Sell rating for Invesco.
Brown covers the Financial sector, focusing on stocks such as KKR & Co, LPL Financial, and Invesco. According to TipRanks, Brown has an average return of 12.7% and a 64.52% success rate on recommended stocks.