Invesco: Market Continues To Underprice AUM Scale Advantage

Summary

• Over the past year, Invesco's -30.34% price decline has trailed the broad market, down -10.43%, and the capital markets ETF, KCE, down -10.46%.
• This is a reflection of the downward pressure of interest rates and inflationary pressures on the broad market, as well as a decline in AUM inflow.
• As opposed to peers such as BlackRock or UBS, Invesco's >$1.4tn AUM is driven principally by retail investors, with 62% of AUM being retail.
• Despite the market sentiment, the asset manager has maintained margin stability at 15.55% profit margins.
• Due to the market overreacting, Invesco's subsequent undervaluation, and the company's continued operational strength, I rate Invesco a 'buy'.

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Invesco (NYSE:IVZ) is a global investment and asset management firm with over 8,400 employees across 26 countries.

With over $1.4tn in AUM, the company recorded $5.92bn in 2022 revenues alongside $1.32bn in EBITDA at a 22% margin.

Introduction

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.