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What's in the Cards for Invesco (IVZ) Stock in Q3 Earnings?

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Invesco Ltd.IVZ is slated to release third-quarter 2017 results on Oct 26 before the market opens. Its revenues and earnings are projected to grow year over year.

Last quarter, the company's adjusted earnings surpassed the Zacks Consensus Estimate. Results were primarily driven by an increase in revenues, partially offset by higher expenses. Improvement in assets under management (AUM) was another positive.

That said, Invesco has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 3.9%.

Moreover, activities of the company in the third quarter encouraged analysts to revise estimates upward. As a result, the Zacks Consensus Estimate for earnings increased 3.1% over the last 30 days. Also, the figure reflects year-over-year improvement of 10%.

Looking at Invesco's price performance, its shares have gained 22.8% so far this year. However, it underperformed the industry 's growth of 27%.

Invesco PLC Price and EPS Surprise

Invesco PLC Price and EPS Surprise | Invesco PLC Quote

Will the rally in stock price continue post Q3 earnings? It depends on the company's ability to impress the market with an earnings beat and improved financials.

Let's take a look at what our quantitative model predicts.

According to our quantitative model, it cannot be conclusively predicted if Invesco will be able to beat the Zacks Consensus Estimate this time around. This is because it does not have the right combination of the two key ingredients - a positive Earnings ESP and a Zacks Rank #3 (Hold) or better - for increasing the odds of an earnings beat.

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

Zacks ESP : The Earnings ESP for Invesco is 0.00%. This is because the Most Accurate estimate of 66 cents matches the Zacks Consensus Estimate.

Zacks Rank : Invesco has a Zacks Rank #2 (Buy), which increases the predictive power of ESP. However, we also need a positive ESP to be confident of an earnings beat.

Factors to Influence Q3 Results

Per the monthly metrics data published by Invesco, its AUM as of Sep 30, 2017 of $917.5 billion was up nearly 6.8% from the Jun 30, 2017 level. The rise in AUM for the third quarter is driven by favourable market returns and net long-term inflows. Thus, given the improvement in AUM in the quarter, the related fee should also witness an increase, thereby supporting revenue growth.

Notably, the Zacks Consensus Estimate for sales for the to-be-reported quarter is $1.31 billion, which is projected to witness growth of 9.4%.

Invesco's expenses in the quarter are likely to witness a marginal increase. Management expects property, office and technology expenses to increase and be in the range of $92-$94 million, owing to the large technology-related projects being put into service and a rise in outsourced administration expenses.

Nevertheless, market expenses are expected to stay flat in the quarter, while G&A expenses are projected to be in line or slightly elevated from the second-quarter levels.

Stocks to Consider

Here are a few stocks you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.

Legg Mason, Inc. LM has an Earnings ESP of +0.97% and carries a Zacks Rank of 3. It is scheduled to report results on Oct 25.

Lazard Ltd. LAZ is slated to report results on Oct 26. It has an earnings ESP of +1.39% and carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

SVB Financial Group SIVB is also scheduled to report results on Oct 26. It has an Earnings ESP of +2.69% and a Zacks Rank #3.

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SVB Financial Group (SIVB): Free Stock Analysis Report

Invesco PLC (IVZ): Free Stock Analysis Report

Legg Mason, Inc. (LM): Free Stock Analysis Report

Lazard Ltd. (LAZ): 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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