Ameriprise Financial, Inc.
) is scheduled to release second-quarter 2014 results tomorrow, Jul
29, after the market closes.
In the preceding quarter, Ameriprise delivered a 9.1% positive
earnings surprise on the back of higher revenues, driven by strong
assets under management (AUM) growth. Moreover, the company
reported earnings beats in all four trailing quarters, with an
average surprise of 6.6%.
Can Ameriprise maintain its earnings streak this quarter? Or will
it disappoint? Let us see how things are shaping up for this
Factors to Impact Q2 Results
Dealing primarily in asset management and advisory businesses,
Ameriprise does not face substantial threat from the overall
sluggish and low interest rate environment. The company derives
nearly more than 60% of its revenues (as of 2013) from fees.
Further, we believe that the overall strong equity market will
continue to drive re-engagement of retail clients this quarter.
Moreover, a strong AUM pipeline as well as rising demand for
advisory services should benefit revenue growth.
On the other hand, the company's aggressive marketing and
advertising strategy will lead to a steady increase in general and
administrative expenses. Also, Ameriprise's continual recruitment
of experienced advisors will expectedly elevate the compensation
expenses. So we do not foresee any reversal in the rising expense
trend this quarter.
Ameriprise's quarterly activities failed to impress analysts.
Hence, the Zacks Consensus Estimate for the quarter remained
unchanged at $1.99 per share over the last 7 days.
Our proven model does not conclusively show that Ameriprise is
likely to beat the Zacks Consensus Estimate in the second quarter.
That is because a stock needs to have both a positive
and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to
happen. Unfortunately, this is not the case here as you can see
The Earnings ESP for Ameriprise is 0.00%. This is because both the
Most Accurate estimate and the Zacks Consensus Estimate stand at
Ameriprise's Zacks Rank #2 increases the predictive power of ESP.
However, we also need to have a positive ESP to be confident of an
earnings surprise call.
Stocks That Warrant a Look
Here are a few asset managers that you may want to consider, as our
model shows that these have the right combination of elements to
post an earnings beat this quarter.
Fortress Investment Group LLC (
) has an Earnings ESP of +17.65% and carries a Zacks Rank #3
(Hold). It is scheduled to report results on Jul 31.
Oaktree Capital Group, LLC (
) has an Earnings ESP of +6.90% and carries a Zacks Rank #2. It is
slated to report results on Jul 31.
The Earnings ESP for The Carlyle Group LP (
) is +4.55% and it carries a Zacks Rank #3. It is expected to
report results on Aug 6.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
AMERIPRISE FINL (AMP): Free Stock Analysis
CARLYLE GROUP (CG): Free Stock Analysis Report
OAKTREE CAP GRP (OAK): Free Stock Analysis
FORTRESS INVEST (FIG): Free Stock Analysis
To read this article on Zacks.com click here.