Earnings Preview: Ameriprise Financial

| About: Ameriprise Financial, (AMP)

Ameriprise Financial (NYSE:AMP) is expected to report Q3 earnings after the market close on Wednesday October 21, with a conference call scheduled for 10 am ET on Thursday October 22.


Analysts are looking for EPS of 64c on revenue of $2.09B. The consensus range is 53c-70c for EPS, and $2.02B-$2.16B for revenue, according to First Call. On September 30 the company agreed to buy Columbia Management, a long-term asset management firm, from Bank of America for about $1B. Several sources said the deal was a positive development for Ameriprise. Barron's called the deal "savvy," and said it strengthens Ameriprise. The company was able to buy Columbia at a sizable discount to historical valuations, according to Barron's. More generally, the publication believes that Ameripirse valuation is attractive, and it expects the stock to outperform the Dow Jones, U.S. Financial Services Index, and the market as a whole by a substantial amount.

Analyst Views

A Bernstein analyst was also pleased by the deal. The firm thinks the acquisition will increase Ameriprise's EPS and multiple. It raised its target on the stock to $44 from $38, and maintains an Outperform rating on the shares. Similarly, UBS initiated Ameriprise following the deal with a Buy rating and set a $41 target on the shares. On a negative note, Credit Suisse recently downgraded Ameriprise to Neutral from Outperform. The firm thinks that the company's exposure to variable annuities would prevent its stock from rising.

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