Neutral Stance on Ameriprise - Analyst Blog

By Zacks Equity Research,

Shutterstock photo

On Jun 25, 2013, we reiterated our long-term recommendation on Ameriprise Financial, Inc . ( AMP ) at Neutral. Our decision rests on the company's sound capital deployment activities and solid first-quarter 2013 earnings. However, we remain concerned about Ameriprise's mounting expenses.

Why the Reiteration?

Ameriprise's first-quarter operating earnings came in at $1.59 per share, marginally surpassing the Zacks Consensus Estimate of $1.57. Also, this improved 9.7% from the year-ago earnings of $1.45. Better-than-expected results were aided by top-line growth, partially offset by a rise in operating expenses. Further, assets under management and administration improved in the quarter.

Following the result release, the Zacks Consensus Estimate went up by 0.5% to $6.63 per share over the last 60 days. Moreover, for 2014, the Zacks Consensus Estimate went up by 0.7% to $7.70 per share over the same time frame. The company currently holds a Zacks Rank #2 (Buy).

In Apr 2013, Ameriprise hiked its quarterly cash dividend by 15.6% to 52 cents per share. Moreover, the board of directors approved a new share repurchase program worth an additional $2 billion for purchasing its common shares through 2014.

Ameriprise has grown inorganically and restructured its portfolio from time to time through acquisitions, sales and spin-offs. The company is expected to continue with its restructuring activities with an aim to remain profitable by focusing on its core businesses.

However, escalating expenses remain a major area of concern for Ameriprise as it may hamper its profitability. Moreover, the sluggish economic recovery and the existing low interest-rate environment are expected to keep Ameriprise's financials under pressure in the near future.

Other Banks to Consider

Some other financial stocks worth considering include GAMCO Investors, Inc . ( GBL ), Noah Holdings Limited ( NOAH ) and Virtus Investment Partners, Inc . ( VRTS ). All these carry a Zacks Rank #1 (Strong Buy).

AMERIPRISE FINL (AMP): Free Stock Analysis Report

GAMCO INVESTORS (GBL): Free Stock Analysis Report

NOAH HLDGS LTD (NOAH): Free Stock Analysis Report

VIRTUS INVESTMT (VRTS): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: AMP , GBL , NOAH , VRTS

More from


Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by