Ameriprise Financial Reports Mixed Q3 Earnings Results

Ameriprise Financial, Inc. showed a significant stock increase year-to-date but faced a slight decline post Q3 earnings release, which fell short of EPS estimates. Despite this, robust asset management growth signals potential strength moving forward, maintaining a positive outlook among analysts.

Date: 01-12-2024

AI Rating: 5

Ameriprise Financial, Inc. has outperformed the broader market, with its stock prices soaring 50.6% year-to-date and 63.7% over the past year. This growth is notably higher than the S&P 500 Index, which posted gains of 25.8% in 2024 and 31.8% over the past year. The reports of a 3.1% drop in stock prices following the Q3 earnings release indicate market sensitivity to earnings performance.

The company's adjusted operating EPS of $8.83 missed analysts’ estimates, a factor that influenced stock performance negatively. However, there are several positive indicators that investors may find encouraging. Ameriprise reported a significant increase in total net revenues, growing over 12% year-over-year to $4.4 billion, alongside adjusted operating earnings growing over 11.1% to $828 million.

Another positive aspect of Ameriprise’s performance is the impressive year-over-year growth in assets under management and administration, which surged 22.2% to $1.5 trillion. The strong client net inflows and asset appreciation reflect robust market positioning and operational efficiency.

Additionally, the free cash flow generation remains strong, which is crucial for navigating market cycles and returning capital to shareholders. The company returned $713 million of capital through share repurchases and dividends during the quarter, demonstrating good governance and shareholder value initiatives.

Looking forward, analysts anticipate a 12.5% year-over-year growth in adjusted EPS to $34.26 for the current fiscal year, suggesting expectations for recovery in earnings performance. Ameriprise has a mixed earnings surprise history, surpassing estimates in three of the past four quarters, which could indicate unpredictability in earnings consistency.

As of now, analysts exhibit a consensus ‘Moderate Buy’ rating, with varied recommendations among the 13 analysts covering the stock. The mixed ratings, including six recommending 'Hold' and one 'Strong Sell,' may suggest some caution among experts in response to the recent earnings miss.

Stocks: AMP