Ameriprise Benefits From Restructuring Efforts Amid Outflows

Ameriprise Financial AMP is well poised for growth, driven by restructuring and streamlining efforts, and focus on core operations. Also, the company’s efficient capital deployment activities show its strong balance sheet position and will continue enhancing shareholder value. However, persistently rising operating expenses and outflows in the Asset Management segment are major near-term headwinds.

Looking at the fundamentals, Ameriprise’s net revenues (GAAP basis) witnessed a CAGR of 1.1% over the last five years (2014-2018). Further, amid a challenging operating backdrop, the same remained relatively stable in the first half of 2019.

With an aim to keep pace with the changing market needs, Ameriprise has been modifying its products and services consistently. Its efforts to launch new products are likely to further support top-line growth.

Additionally, Ameriprise remains focused on strengthening its core operations. In sync with this, in April, it announced a deal to divest the Ameriprise Auto & Home business. Further, the company plans to offer a range of banking and credit products through its federal savings bank – Ameriprise Bank – to its wealth management clients in the quarters ahead. These initiatives are further expected to support the company's financials.

Nonetheless, elevated levels of outflows in the Asset Management segment, which is one of the major sources of the company’s revenues, is a cause for concern. Outflows are expected to continue in the upcoming quarters amid tough operating backdrop, which will keep affecting the segment’s performance.

Further, over the last five years (ended 2018), the company’s expenses witnessed a CAGR of 1.6%. Elevated costs, mainly because of advertising campaign and technology upgrades, are expected to hurt bottom-line growth to some extent in the quarters ahead.

Stocks to Consider

Few investment management stocks worth a look are T. Rowe Price Group, Inc. TROW, SEI Investments Company SEIC and Federated Investors, Inc. FII.

T. Rowe Price’s earnings estimates for the current year have been moving upward over the past 30 days. Also, its shares have rallied more than 28% over the past two years.

SEI Investments’ earnings estimates for 2019 have been revised upward over the past 30 days. Over the past two years, the company’s shares have risen almost 1%.

Federated Investors’ 2019 earnings estimates have been moving upward over the past 30 days. Further, its shares have rallied more than 18% in the past two years.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

Click to get this free report

Ameriprise Financial, Inc. (AMP): Free Stock Analysis Report

SEI Investments Company (SEIC): Free Stock Analysis Report

Federated Investors, Inc. (FII): Free Stock Analysis Report

T. Rowe Price Group, Inc. (TROW): 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.

Other Topics


Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More