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Investment Managers' Q4 Earnings on Jan 26: IVZ, TROW, FII

The investment management industry, part of the broader Finance sector, has performed decently over the past several quarters. However, the picture looks slightly grim for fourth-quarter 2016.

Amid the post-election euphoria and the Fed rate hike, S&P 500 gained 3.3% during the three months-ended Dec 31, 2016, while fixed income markets and emerging markets witnessed negative returns. Therefore, average asset under management (AUM) levels for most of the investment managers are expected to record a fall. As such, excluding ETFs, flow trends should be muted.

Further, strengthening of the U.S. dollar is expected to put pressure on these companies' fees. Also, heightened regulatory scrutiny has created a tough backdrop for traditional asset managers.

Notably, per our Earnings Preview report, overall earnings for the Finance sector in the fourth quarter are expected to be up 20.1% year over year.

Now, let's have a look at the three investment management stocks that are scheduled to report their earnings tomorrow.

Federated Investors, Inc.FII , which is set to announce its results after market close, has a Zacks Consensus Estimate of 51 cents for the upcoming release. It reflects year-over-year growth of about 10.1%. Notably, the estimates remained stable over the past 30 days.

Also, it is difficult to conclusively predict an earnings beat this quarter as the company carries a Zacks Rank #4 (Sell) with an Earnings ESP of 0.00%.

(You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .)

Notably, the company delivered an average positive earnings surprise of 6.48% in the trailing four quarters as depicted in the chart below.

Federated Investors, Inc. Price and EPS Surprise

Federated Investors, Inc. Price and EPS Surprise | Federated Investors, Inc. Quote

Invesco Ltd.IVZ is scheduled to announce its results before the opening bell. The chances of the company beating the Zacks Consensus Estimate in the quarter are less owing to mounting operating expenses and lower AUM. However, modest revenue growth is likely to support the earnings to some extent (read more: Will Invesco Disappoint Again this Earnings Season? ).

Notably, this stock lagged the Zacks Consensus Estimate in three of the trailing four quarters. It currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Invesco PLC Price and EPS Surprise

Invesco PLC Price and EPS Surprise | Invesco PLC Quote

T. Rowe Price Group, Inc.TROW is likely to beat Zacks Consensus Estimate announce results before the market opens. Strong performance of equity markets is expected to lead to improved AUM, given its equity-heavy asset mix. However, rising expenses is expected to marginally hurt the results (read more: T. Rowe Price Q4 Earnings: What's in the Cards? ).

Further, this stock, carrying a Zacks Rank #3 surpassed the Zacks Consensus Estimate in three of the trailing four quarters as depicted in the chart below.

T. Rowe Price Group, Inc. Price and EPS Surprise

T. Rowe Price Group, Inc. Price and EPS Surprise | T. Rowe Price Group, Inc. Quote

Check our full write-up on earnings releases of these stocks later!

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T. Rowe Price Group, Inc. (TROW): Free Stock Analysis Report

Invesco PLC (IVZ): Free Stock Analysis Report

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

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


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

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